Will Intel Fall Out Of The DJIA?

Intel's stock (NASDAQ: INTC) is coming under further pressure today, losing 6.5% down but holding above the $20 level. With news that Intel is facing the potential reality of being delisted from the Dow Jones Industrial Average, the flow of capital that follows the index would no longer hit the stock.

The semiconductor giant's stock has experienced a precipitous decline of 56% through 2024, making it the worst performer in the index. Today so far it is Boeing that is suffering most in the Dow, but the fall from Intel has been rather staggering as it's competitors thrive. Such a downturn is also particularly notable given that Intel has been a venerable member of this index for an unbroken stretch of 25 years since its inclusion in 1999, during the height of the dot-com boom.

Beyond its performance in the Dow, Intel also finds itself in a precarious position within the larger S&P 500 index, ranking as the second-worst performing stock this year. It trails only Walgreens Boots Alliance in its diminished market standing, with WBA shedding 65%.

In an attempt to navigate these financial straits, Intel has made significant strategic adjustments, including suspending its quarterly dividend payments to shareholders—a move that signals a departure from a long-standing tradition of consistent shareholder returns. Additionally, the company has announced workforce reductions affecting 15% of its employees as part of a broader business transition plan.

Amid these challenges, the stock market is rife with speculation regarding Intel's replacement in the Dow Jones Industrial Average. Attention has turned to Nvidia, a dynamic player in the graphics processing unit (GPU) market, whose stock has charted an impressive ascent of 150% this year, crowning it the top performer in the S&P 500 index. Nvidia's meteoric rise sharply contrasts with Intel's current predicament and has fueled discussions about an impending shake-up in the composition of the prestigious index.

The Dow Jones Industrial Average, known for its exclusive selection of 30 blue-chip companies, periodically reassesses its constituents to reflect the evolving landscape of the U.S. economy and stock market. These assessments ensure that the index remains representative of prevailing industry trends and market leaders. As Intel contends with the prospect of leaving the Dow, the broader implications for the technology sector, investor sentiment, and the index's composition remain a focal point for market watchers across the globe.

Intel's once-stable position within the Dow Jones Industrial Average appears increasingly tenuous as the company grapples with profound challenges and competitive pressures. It seems only a matter of time now before INTC find's itself out, but markets can shift in a blink. Keep a watchful eye.