Goodbye Intel! Will NVIDIA be included in the Dow Jones Industrial Average after the 1:10 split?
After the stock split, NVIDIA will meet the criteria for inclusion in the Dow Jones Industrial Average. Media analysis suggests that NVIDIA may replace Intel, which currently has the lowest weighting among the Dow components
This week, "the most important stock on Earth" Nvidia once again delivered outstanding performance far exceeding market expectations, unilaterally rising despite the bad news of postponed interest rate cuts, almost single-handedly supporting the performance of US technology stocks and even global markets.
Nvidia also announced a 10-for-1 stock split while releasing its financial report. After the split, the stock price will decrease from over $1000 to around $100.
The stock split is not only beneficial for reducing the threshold for retail investors to buy Nvidia, but also means that Nvidia's stock price will meet the selection criteria for one of the three major US stock indices, the Dow Jones Industrial Average.
The Dow Jones Industrial Average is one of the oldest stock indices in the world, initially compiled in 1896, and includes 30 blue-chip stocks headquartered in the United States. The components of this index are periodically adjusted by a committee composed of S&P Dow Jones Indices and The Wall Street Journal.
Unlike indices like the S&P 500, the Dow is weighted by stock price rather than market capitalization. Since Nvidia's stock price had already approached $1000, its inclusion in the Dow would cause a significant deviation from the index (the highest-priced stock in the Dow, UnitedHealth Group, is around $500 per share, only half of Nvidia's price). However, this issue will no longer exist after the stock split.
The criteria for Dow components selection include "having a good reputation, demonstrating sustained growth, and attracting a large number of investors' attention," with industry representativeness also being an important reference dimension. As a leading global chip giant, Nvidia clearly meets these criteria.
The last adjustment to the Dow components was in February when Amazon replaced ExxonMobil. Media analysis indicates that if Nvidia is included in the Dow after the stock split, it is highly likely to replace the chip industry leader Intel. Intel currently only accounts for 0.5% of the Dow's weight, the lowest among its components. In terms of industry representativeness, the current global chip industry leader Nvidia is evidently more in line with the Dow's selection criteria than the traditional chip giant Intel.
The Nvidia stock split will be completed after the US market closes on June 7 (Friday), and trading will begin on Monday (June 10) based on the post-split price. Media speculates that Nvidia may be included in the Dow components in the second half of this year or by 2025