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Intel will lose its place in the Dow Jones Industrial Average after a 25-year run with Nvidia, S&P Dow Jones Indices said on Friday, the latest blow to the struggling chipmaker that was among the first two technology firms to be included on the blue chip. index.

Once the dominant force in chipmaking, Intel has in recent years ceded its manufacturing advantage to rival TSMC and missed out on the AI-generating boom after missteps, including passing on an investment in OpenAI, owner of ChatGPT.

Intel shares have fallen 54% this year, making it the worst performer in the index and leaving it with the lowest-priced stock in the price-weighted Dow.

The stock fell about 1% to $22.79 in extended trading on Friday, while Nvidia rose more than 2% to $139.17.

The development comes a day after Intel expressed optimism about the future of its PC and server businesses, forecasting current-quarter revenue above estimates but warning it had “a lot of work to do.”

“Losing Dow Jones inclusion status would be another reputational blow for Intel as it faces a painful transformation and loss of confidence,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“It will also mean that Intel is not included in exchange-traded funds (ETFs) that track the index, which could further affect the share price.”

Launched in 1968, the Silicon Valley pioneer sold memory chips before moving into processors that helped launch the personal computer industry.

In the 1990s, Intel Inside stickers turned commodity electronic components into premium products and eventually became ubiquitous in laptops.

Intel’s revenue was $54 billion in 2023, down nearly a third from 2021, when Pat Gelsinger took over as CEO. Analysts expect Intel to report its first annual net loss this year since 1986.

The company is worth less than $100 billion for the first time in 30 years.

That pales in comparison to Nvidia, which is valued at $3.32 trillion, making it the second most valuable company in the world.

Nvidia’s AI Driver

Nvidia has emerged as a cornerstone of the global semiconductor industry, thanks to the essential role its chips play in powering AI-generating technologies, which have fueled a sevenfold rise in its shares over the past two years.

The company’s stock has more than doubled this year alone.

Once popular only among gamers looking for PCs with Nvidia graphics processors, the company is now the second most valuable in the world and seen as a barometer for the AI ​​market.

The company’s 10-for-one stock split that took effect in June also helped pave the way for its addition to the index, making its rising stock more accessible to retail traders.

Intel, on the other hand, has struggled to gain a share of the Nvidia-dominated AI chip market, with the first chips hard to come by and even harder to replace in data centers. AI, due to the technological advantage of processors and high costs. of their replacement.