Speculation is growing that Intel (INTC) will be delisted from the Dow Jones Industrial Average as the microchip company’s stock continues to decline.
Intel was one of the first technology companies to join the Dow index back in 1999 at the height of the dot-com stock market rally. It has been a member of the Dow for 25 consecutive years.
However, the Reuters news agency is reporting that Intel’s status in the Dow Jones Industrial Average is now under threat after the company’s share price has declined 54% this year.
Intel is not only the worst performer in the Dow, an index of 30 blue-chip stocks that’s meant to represent a cross-section of the U.S. economy, it is also the second-worst performing stock in the benchmark S&P 500 index this year.
Only retail pharmacy chain Walgreens Boots Alliance (WBA), which itself was removed from the Dow earlier this year, has performed worse than Intel so far in 2024.
Walgreens was replaced in the Dow Jones Industrial Average this February by e-commerce giant Amazon (AMZN).
Now, Reuters is reporting that there is growing speculation that Intel’s days in the Dow are numbered and that it will be removed from the bellwether index during the next rebalancing, which tends to happen on an as needed basis.
Removal from the Dow would be yet another blow to Intel, which is struggling to pivot its business from designing microchips to manufacturing them through a new foundry unit.
Critics say that Intel’s costly move to become a manufacturer of microchips had led it to miss out on the artificial intelligence (A.I.) boom and lose valuable market share to competitors such as Advanced Micro Devices (AMD).
Intel most recently suspended its quarterly dividend payment to shareholders and announced layoffs affecting 15% of its workforce as it shores up cash for its transition and turnaround.
Intel’s stock is now down more than 70% from an all-time high reached in August 2000. The company’s share price is currently at $22.04 U.S. per share.
Intel’s market capitalization has fallen below $100 billion U.S. for the first time in 30 years.
There are rumors circulating on Wall Street that rival chipmaker Nvidia (NVDA) could replace Intel in the Dow Jones Industrial Average.
Nvidia’s stock has risen 150% this year and is the best-performing stock in the benchmark S&P 500 index. Nvidia’s market capitalization is near $3 trillion U.S.
