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Nvidia (NVDA) stock is in focus ahead of the company's inclusion in the Dow Jones Industrial Average (^DJI) with it set to replace Intel (INTC) in the index. The chipmaker will join the index on Friday along with Sherwin-Williams Company (SHW). Morning Brief Hosts Seana Smith and Brad Smith break down what investors need to know.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Naomi Buchanan.
Nvidia, another favorite here, Yahoo Finance. The company joining the Dow Jones Industrial Average later on this week. The chipmaker set to replace its rival Intel on Friday. This following Amazon being added to the index. That happened back in February. So, this, of course, is the latest move here. Significance of this, obviously just tech, in terms of the positioning within the Dow Jones Industrial Average, something that we have seen now for quite some time, but I really think that this just is a testament to the power of Nvidia. We talked about the massive outperformance.
To the weakness of Intel too.
And the weakness of Intel, exactly. It's it's a dual story there, but you're looking at one-year chart of gains of just around 170% over the past two years. You're looking at massive gains in this stock. They really have been the leader in terms of the AI revolution, the AI adoption story when you take a look at the street's analyst ratings on this stock and estimates going forward. Yes, growth is expected to slow, but it's still expected to be astronomical relatively speaking. It's hard to find those who are betting against Nvidia and their momentum at this point. So I think, yes, this is significance here, of course. So, got a question, maybe what this means ultimately for Nvidia's performance over the next year, and this is going to be an interesting test, I think, because there's recent data out showing that the following 12-month performance after stock is added to the Dow, it actually declines, whether or not that is going to be the case for Nvidia. I'm going to bet against that right now. I think that they're actually going to post gains, but that will be an interesting test, just given the historical context of this conversation.
You know, I'm not a betting man, but if I was, I would agree with you. And I think at the end of the day, you also think about the number of people that are now going to own Nvidia, whether they like it or not, because if you own the Dow Jones Industrial Average, then you will have a little bit of exposure to Nvidia, which is not a bad thing, to many of Sean's points here. Now, thinking further out and what this means for some of the other components that are going to go into this. And this one was a head scratcher. You mentioned it as we were in the break, and I think any of us who saw this release come across from S&P Global indices over the weekend or just before the weekend may have been scratching our heads. But Sherwin-Williams also going to be joining the Dow Jones Industrial Average as well as part of this move. So, some big moves coming for Sherwin-Williams and Nvidia. I mean, a neighborhood that they probably wouldn't have found themselves in had it not been for a changeover like this, but no doubt they are part of the sentence as well.
