Nvidia will join the Dow Jones, increasing exposure to semiconductors and materials sectors

From Nasdaq: 2024-11-06 06:15:00

Nvidia will finally join the Dow Jones Industrial Average, replacing Intel and challenging Apple as one of the most valuable companies in the world. The move is set to increase the index’s exposure to the semiconductors industry and the materials sector, with implementation before Nov. 8.

Nvidia’s inclusion in the Dow has been anticipated, given its dominance in the AI chip industry. The company’s market cap now surpasses Intel’s by over 30 times, fueled by profits from AI advancements. After-hours trading saw Nvidia rising 2.9%, while Intel fell 1.8%.

Alphabet, Tesla, and Meta Platforms are the remaining Magnificent Seven companies not on the Dow. Alphabet, with a market cap of $2.1 trillion, stands out as a potential candidate for inclusion. However, no clear parallel swap exists for Alphabet the way it did for Nvidia and Intel.

Alphabet’s admission to the Dow may take time, as changes to the index’s constituents happen at the discretion of its managers. With Alphabet being a market leader for years, it is expected to eventually join the Dow, but it could be a process that unfolds over several years.

Consideration before investing in Nvidia is crucial, as recent analysis from the Motley Fool Stock Advisor team did not include Nvidia in their list of top 10 stocks. The service has outperformed the S&P 500 since 2002, offering guidance on portfolio building and new stock picks monthly.

Disclosure: The author, Jeremy Bowman, has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends a range of companies including Nvidia, Apple, Microsoft, and Alphabet. John Mackey, Randi Zuckerberg, and Suzanne Frey are board members of The Motley Fool.



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