Intel and Nvidia: the king is dead; long live the king

You might call it the changing of the guard: Nvidia is to join the Dow Jones Industrial Average; and to do so, the AI chipmaker will take the place of none other than its long-time rival, Intel, something that also allows the index to maintain the prominent importance of chip designers in the current economy.

Intel has proved itself unable to maintain the pace of innovation that led it to drive the PC revolution, despite the brilliance of many of its managers, and must now pay the price by giving way to a company that has been building momentum for a long time, one that symbolizes a completely different approach to computing, one focused on AI, the cloud and GPUs. We now live in a different economy, one where practically all activities, in one way or another, will be powered by AI, much like the internet changed the rules three decades ago.

Joining an index like the Dow is always a milestone; it means that all the funds that use it as a reference will buy shares in any of its 30 companies. A new member joining usually triggers great interest in its stock, which as a result tends to rise. We saw this in November 1999, when Yahoo! joined the S&P 500, at the height of the dot.com boom, ushering in the internet era; or in December 2020 when Tesla did the same, signaling for many the moment when the markets saw the green economy…