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Intel’s stock price falls 53% this year due to its inability to respond to AI
Give up the position of semiconductor representative after 25 years
NVIDIA logo. AP News
S&P Dow Jones Indices announced on the 1st (local time) that NVIDIA, a global artificial intelligence (AI) semiconductor leader, will push out Intel and be included in the Dow Jones Industrial Average (Dow) from the 8th of this month.
The Dow, launched in 1896, is the oldest of the three major indices representing the United States and is comprised of 30 blue-chip companies representing the United States. Intel, famous for its advertising slogan ‘Intel Inside’, lost its position as a leading semiconductor company 25 years after being included in the Dow Jones Industrial Average in 1999.
As Intel was evaluated as having failed to properly respond to the recent rapid growth of the AI semiconductor market, its stock price fell due to worsening performance. At the same time, there were predictions that it would steadily be expelled from the Dow. Intel’s stock price has fallen about 53% this year alone, and its market capitalization has fallen to $98.9 billion (approximately KRW 136.5 trillion), one-third of the level at the beginning of 2020 ($292 billion). In August, it announced a major restructuring plan to cut costs by $10 billion, laying off 15,000 employees and not paying dividends in the fourth quarter of this year (October to December).
On the other hand, NVIDIA has emerged as an unrivaled supplier of core graphics processing units (GPUs) required to run AI. It currently occupies approximately 90% of the global AI accelerator market. The stock price soared about 240% last year alone and has risen more than 170% this year as well. In June of this year, its market capitalization exceeded $3 trillion, and at one point, it overtook Apple to become the No. 1 company in market capitalization. Currently, Nvidia’s market capitalization is approximately $3.32 trillion. The Wall Street Journal (WSJ) commented on this change in the Dow, saying, “This would have been unthinkable even a few years ago,” and “It reveals a reversal in the fortunes of NVIDIA and Intel within the technology industry.”
New York = Correspondent Lim Woo-sun imsun@donga.com
Reporter Kwak Do-young now@donga.com
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