Intel, once a leading tech giant and a founding member of the Dow Jones Industrial Average during the late-'90s dot-com boom, faces potential removal from the index due to a significant decline in its share price, which has dropped nearly 60% this year. This decline has made Intel the worst performer on the Dow, leading analysts to speculate about its future on the list.
A recent market selloff, coupled with an 11.1% drop in global semiconductor sales—driven largely by lower memory chip demand—has aggravated Intel's situation. The company, having missed the artificial intelligence boom and facing mounting losses in its contract manufacturing unit, is struggling to regain its footing.
In an effort to turn things around, Intel announced the suspension of dividends and layoffs affecting 15% of its workforce, moves some analysts believe may come too late. The company's weight in the Dow is minimal, at just 0.32%, and its current share price of $20.13 is significantly lower than that of other index members. Should Intel be removed, potential replacements could include Nvidia, which has gained over 160% this year due to its pivotal role in generative AI, or Texas Instruments, known for its stable performance. Analysts suggest that any new addition would likely need to align closely with the average stock price of current Dow members, which is around $209. Overall, Intel's potential exit from the Dow would further damage its reputation and could exacerbate its stock performance challenges.
