(New York) The American semiconductor giant Nvidia will join the famous Dow Jones index, in which it will replace its competitor Intel, announced Friday S&P Dow Jones, which manages the index.
Published yesterday at 7:52 p.m.
The permutation will take place before the opening of the November 8 session on Wall Street, according to a press release.
This decision is a new sign of the emergence of Nvidia, now the second largest capitalization in the world, just a breath away from Apple.
It follows a trajectory almost opposite to that of Intel, a historic figure in the microprocessor sector, but in difficulty for several years.
Intel is seeking to catch up in the niche of chips adapted to the development of generative artificial intelligence (AI), of which Nvidia is, for the moment, the undisputed leader.
Unlike most of its major competitors, led by Nvidia, the group manufactures a significant proportion of its chips itself.
The Dow Jones, which has 30 stocks, is, by far, the oldest index on Wall Street, with its 128 springs.
In addition to Nvidia, paint and coatings specialist Sherwin-Williams will also become a member of the venerable index, where it will succeed industrial conglomerate Dow.
Intel and Dow were part of the Dow Jones since 1999 and 2017 respectively.
These changes “were initiated to ensure better representation of the semiconductor and materials industries,” said S&P Dow Jones, a subsidiary of the S&P Global group.
Since its creation, the composition of the Dow Jones has been modified 59 times, including Friday’s announcement, to include new economy stocks such as Amazon, Apple and Cisco.
None of the thirty initial residents of the index are yet part of it. General Electric was the last original member to exit, in 2018.
Its representativeness is often contested, because each of the 30 securities included there is weighted according to the value of the action, a parameter considered to be of little relevance.
The health insurer UnitedHeatlh is thus, by quite a distance, the first weighting of the lot (8.9% of the index), while Apple, the world’s largest capitalization, is only 12e (3.5% of the index).
In the case of Wall Street’s two other major indexes, the NASDAQ and the S&P 500, the importance of each company is relative to its total market capitalization.
However, even if professionals follow NASDAQ and S&P 500 more closely, the general public often pays close attention to the Dow Jones.
