Nvidia stock will replace Intel on the Dow Jones Industrial Average

The addition of Nvidia, effective Nov. 8, also marks a historic moment for the semiconductor industry, as the AI ​​chip leader replaces its struggling rival. IntelWhich has been in the Dow since 1999.

S&P Dow Jones Indices, the company that runs the index, said it would add the paint manufacturer Sherwin-WilliamsReplacing chemical giant Dow.

Shares in Nvidia have risen more than 180% this year as the tech giant touts its powerful, high-cost processors that create AI, a technology seen as the next phase of innovation.

Intel, one of Silicon Valley’s most iconic companies, has seen its shares fall 50% this year as the company struggles to cope with the AI ​​boom.

The Dow Jones Industrial Average, founded by Charles Dow in 1896, is often used to measure the state of the US stock market, the world’s largest.

Unlike the S&P 500, which is weighted by company capitalization, the 30-stock Dow is price-weighted, meaning higher-priced stocks have a greater influence on its movements.

Technological companies the apple, Microsoft, IBM, Salesforce and Cisco Systems they are currently in the index google, Amazon and Meta are not.

The DJIA’s constituents are selected by a committee, and tend to favor well-established companies that represent a broad group of industries.

This has historically sidelined many tech giants, despite their size and influence.

With their high valuations, including too many tech companies would also drown out the impact of the other sectors represented in the index.