This year, Intel's stock price has fallen nearly 60%, making it the worst-performing stock in the Dow, and Intel is also the least influential member in the Dow. If Intel is kicked out of the Dow, it will further damage its already damaged reputation and further hit its stock price.
During the technology bubble period in 1999, $Intel (INTC.US)$ and $Microsoft (MSFT.US)$ was one of the first technology companies to enter the dow jones industrial average index. However, due to a significant decline in stock prices, intel may be removed from this blue chip index.
The last update to the dow jones index was in February, when the struggling chain of pharmacies $Walgreens Boots Alliance (WBA.US)$ Replaced. $Amazon (AMZN.US)$ Analysts point out that Intel's stock price has fallen nearly 60% this year, making it the worst-performing stock in the Dow. If Intel is kicked out of the Dow, it will further damage its already damaged reputation and further hit its stock price.
In addition, Intel is the least influential member in the Dow Jones. On August 29, the closing price of Intel was $20.13, and its weight in the Dow Jones was only 0.32%.
In order to turn things around, Intel announced a suspension of dividends and a workforce reduction of over 15% in last month's earnings report. However, some analysts and former board members believe that these measures may be too late.
Who will replace Intel?
Analyst Ryuta Makino believes that $NVIDIA (NVDA.US)$ may replace Intel to enter the Dow Jones Industrial Average. Nvidia's chips play a key role in generative AI and its stock price has risen by over 160% this year, making it one of the most valuable companies in the world. In May, Nvidia conducted a stock split, which also increases its chances of being included in the Dow Jones.
However, some investors believe that Nvidia's stock has high volatility, while the Dow Jones prefers stable stocks.
Another option is Taiwan Semiconductor, which has a history of nearly a century and strong production capabilities in the United States. $Texas Instruments (TXN.US)$
Daniel Morgan, Senior Portfolio Manager at Synovus Trust, said that Texas Instruments' stock has risen by over 20% this year, currently at $214.34, close to the average price of Dow Jones constituents at $209. Former Chairman of the Dow Jones Index Committee, David Blitzer, mentioned that "in the event of a stock being removed, a stock with a price close to the current list average price may be given priority as a replacement."
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