Dow swaps Intel for Nvidia leaving no index free from wild AI volatility

On Friday, Nvidia will supplant Intel after 25 years as the semiconductor sector's representative on the Dow Jones Industrial Average. The decision, announced late last week by S&P Global, which oversees the DOW, was made to "ensure a more representative exposure to the semiconductors industry" and will go into effect before …

[Filippo]

What happens to Nvidia stock if AI ROI keeps not showing up, people start wondering if it ever will, and interest wanes?

[abend0c4]

it'll get dropped from the index and replaced by something else - which is why index-based funds typically offer more stable returns in the long run.

Though I'm not sure that political events in the US may not be a more immediate source of volatility.

[Blank Reg]

Except that it only gets replaced after it drops. Last time I checked the top 10 stocks made up over half the value of the dow, so when things go bad they will go bad fast and hard

[katrinab]

But that means the index is buying high and selling low, which isn't really what you want.

[LVPC]

I'm more interested in what happens when Trump imposes his 20% import duty on everything imported into the US.

Nvidia needs Taiwan's chips, Seagate and Western Digital need storage devices manufactured in other countries, etc.

And the US is now a net food importer. Nobody wants their grocery Bill jumping by 10-20%.

Most likely outcome is there will be so many carve-outs that only China gets hit. After all, his buddy-buddy Musk won't want to pay 20% more for chips.

[Anonymous Coward]

Maybe that’s why Musk…

Space X thus Starlink rushing to move fabs, development, and assembly of gear including routers to Vietnam. His partners there are on a hiring binge.

[Roopee]

More Chips...

Are you suggesting that he’s overweight (as well as over-valued)?

[Blank Reg]

If Dementia Don the Incontinent Con follows through on deporting undocumented immigrants then not only will food prices go up much more than 20%, there will be food shortages as there will be no one to pick the crops.

They had better hope that he was lying once again