The struggling Oregon-based microprocessor manufacturer ends a 25-year run on the prominent stock market index.
Stock prices for Intel rebounded Tuesday after taking a slight tumble Monday in light of the company’s removal from the Dow Jones Industrial Average last week.
The company, based in Santa Clara, California but whose Hillsboro campus is Oregon’s largest private employer, ended its streak of 25 years listed on the blue-chip stock index Friday with the announcement by S&P Global that it would no longer be listed on the index.
Intel, the worst performer this year on the Dow, is regarded as late to the game on AI-powered chipmaking, a strength of Nvidia, which recently became the second-most valuable company in the world after Apple, with a market cap of $3.25 trillion.
In the same statement, S&P Dow Jones Indices announced it will also swap chemical company Dow Inc. with competitor Sherwin Williams.
“The index changes were initiated to ensure a more representative exposure to the semiconductors industry and the materials sector respectively,” reads the statement.
The changes take effect Nov. 8.
Founded in 1968, Intel developed the first commercial microprocessor chip and was a key player in the rise of Silicon Valley and personal computing, to the point “Intel Inside” stickers were ubiquitous on personal computing devices in the 1990s, Reuters has reported.
But analysts regard the company as having missed the boat on AI, at least initially. These factors have caused it to hit several unwanted milestones this year. Intel’s stock has dropped 54% and it lost the mantle of leading semiconductor manufacturer to Taiwan-based TSMC; the day before S & P’s announcement, the company posted $16.6 billion in quarterly losses, the biggest loss in its 56-year history. Earlier this year, Intel’s market value dipped below $100 billion for the first time in 30 years. And it’s expected to take its first annual net loss since 1986.
The Dow Jones Industrial Average is a collection of 30 prominent publicly-traded companies representing different sectors of the U.S. economy. It’s one of the country’s oldest and most followed equity indices and Dow membership is considered a prestigious honor among businesses. The Dow 30 today includes heavy hitters like Coca-Cola, WalMart, Amazon, Disney, Visa and Oregon-based Nike.
On Monday, Intel shares tumbled from $22.96 to $22.52; by close of business Tuesday, they were up to $23.32 — but still way down from the company’s all-time high stock price of $62.07, recorded in 2021. Nvidia shares were valued at $139.79 at close of business Tuesday.
Intel is now in the process of laying off 15,000 people, including 3,000 in Oregon, on its way to reducing $10 billion by 2025.
Intel’s struggles come despite emerging as a big winner of 2022 Chips and Science Act, the Biden Administration’s plan to restore the U.S. semiconductor industry. It has so far received around $20 billion in grants and loans from the federal government as well as $115 million from the state to subsidize additions to its D1X research center and other facilities.
Intel once considered buying Nvidia, according to a recent New York Times story titled, “How Intel Got Left Behind in the AI Chip Boom.” Nvidia was founded in 1993 and employs more than 29,000 people around the globe. Like Intel, the company is based in Santa Clara but has a campus in Hillsboro.
Nvidia’s graphics processing units now power many AI systems like generative AI chatbot ChatGPT. Due to demand for AI accelerator chips, the company’s stock has risen more than 100% in 2024.
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