Intel Corporation (NASDAQ: INTC), a prominent member of the Dow Jones Industrial Average since the late 1990s, is facing potential removal from the index due to a significant decline in its share price. This year, Intel’s shares have fallen nearly 60%, making it the weakest performer on the Dow and the stock with the lowest price in the index.

This potential removal comes at an important time for Intel, which is already grappling with multiple challenges, including missing out on the artificial intelligence (AI) boom and mounting losses in its contract manufacturing unit.

In response to these challenges, Intel has taken steps to stabilize its finances, including suspending its dividend and reducing its workforce by 15%. While these actions aim to support a turnaround, some analysts are skeptical about their effectiveness. As Intel’s future on the Dow remains uncertain, discussions about potential replacements, such as Nvidia (NASDAQ: NVDA) and Texas Instruments (NASDAQ: TXN), are emerging among investors.

Why It Matters: Intel’s possible removal from the Dow Jones marks the growing importance of AI. As Intel struggles to maintain its relevance, its exit could symbolize the changing guard in the semiconductor sector and signal a pivot towards companies that are better positioned for future tech advancements.

• Intel’s Share Price Decline: Intel has experienced a nearly 60% decline in its share price this year, making it the poorest performer on the Dow Jones Industrial Average. The chipmaker’s low stock price has placed it at risk of removal from the price-weighted index, where the stock price is an important factor for inclusion.

• Missed Opportunities and Mounting Losses: Intel’s exclusion from the AI boom, highlighted by its decision to pass on an investment in OpenAI, has negatively impacted its market standing. Additionally, the company’s contract manufacturing unit, which was aimed at challenging competitors like TSMC, has seen increasing losses, further straining its financial position.

• Potential Replacements on the Dow: Analysts speculate that Nvidia, whose stock has surged over 160% this year due to its crucial role in AI, could replace Intel on the Dow. However, Nvidia’s volatility may be a concern. Texas Instruments, a more stable and established chipmaker with significant U.S. production capacity, is also a potential candidate.

• Impact on Intel’s Market Value and Reputation: If removed, Intel would not only suffer reputational damage but also potentially face further declines in its stock price. The company’s market value has already fallen below $100 billion for the first time in 30 years, marking a significant setback for the once-dominant tech giant.

Go Deeper -> Intel’s Dow status under threat as struggling chipmaker’s shares plunge – Reuters