Nvidia to join Dow Jones Industrial Average, replacing Intel

[anonu]

The DJIA is a dinosaur and irrelevant. Its price-weighted because that was easier to calculate than a market-cap weighted fund when the thing was created ~140 years ago. Which means that high dollar value stocks have more weight in the index which doesn't really make sense.

But worse, how we talk about the index, even today on radio and TV, in terms of nominal points up or down is completely ridiculous. Just yesterday "the Dow Jones was up 100 points". Ok - no reference value, no percentage change: means nothing to me. And we wonder why we are financially illiterate in this country.

[stackghost]

I agree that nowadays the Dow is somewhat obsolete, but:

The DJIA is not meant to be viewed in isolation but in the context of other indexes like DJTA, the idea being that if industrial companies are doing well but the railroads or shipping aren't, it will be reflected in those respective averages diverging, hinting at deeper economic problems.

Also they adjust for stock splits now.

[bluGill]

The dow was useful in pre computer times when a reborter could calculate it every few minutes. The s&p500 Is a better indicator but that took hours by hand and so was only done overnight. now that we have computers and index you want can be done in milliseconds and so the dow needs to die.

[pjfin123]

Another advantage of a price-weighted stock index is that it's easier to track with a real portfolio because they don't need to rebalance as frequently. To replicate the performance of the DJIA you just have to buy one share of each stock and hold them, you only need to place trades when a company is added or removed from the index.

With a market cap weighted index you have to make more frequent trades every time a company does a buyback or issues new shares.

[hanklazard]

re: up XX number of points, I haven't bothered for many years, but that sounds like NPR's "All Things Considered" or "Marketplace". Always drove me nuts too and does nothing to help people understand financial markets.

[pjfin123]

> Just yesterday "the Dow Jones was up 100 points". Ok - no reference value, no percentage change: means nothing to me.

This always really bugged me

[EVa5I7bHFq9mnYK]

Maybe splits and reverse splits weren't a thing back then, so price really meant something?

[manojlds]

How is the second point anything to do with DJIA and this news?

[insane_dreamer]

Intel's CEO wanted to buy NVidia 20 years ago. Unfortunately for Intel, the board of directors killed the proposal as "too expensive" at $20B. Granted no one could see the future of AI on GPUs, but think of the ROI on that investment.

[ipsum2]

Nvidia would've acquired the culture of Intel, so it wouldn't be the company it was today if that happened.

[metadat]

And if the Intel board jumped on every expensive acquisition novelty that came to the table, how does that go?

Everyday I look at stocks and wish I'd known to buy the ones that went up today.

Overall, pretty uninteresting and uninsightful, unless you have Doc Brown's DeLorean with the Mr. Fusion upgrade (BTTF II). Even then, would it actually be good if you built your own reality to such an extent? I'm sure life's weird for the UHNW's, unclear if it's actually better. We're all still stuck on the same planet, our kids and kid's kids will all face the same struggles.

Even still, today is a pretty interesting temporal location to occupy!

[asah]

Every big techco was the target of numerous buyout offers along the way. Yahoo! tried to buy Google and Facebook got any number of offers.

It makes sense when the growing company doesn't have a path forward (e.g. YouTube's bandwidth costs) or the price is truly crazy (e.g. WhatsApp).

It's not clear to me why Instagram sold out to Facebook for $1B.

[DeathArrow]

Before AI Nvidia made some nice money from the crypto craze. Also, during pandemics and after, but before AI, there was a severe shortage of Nvidia GPUs.

[Shorel]

Intel involvement would have killed any initiative that would lead to what Nvidia is now.

So, the ROI would have been much, much lower.

[throwaway48476]

AMD at one point wanted to buy Nvidia too.

[wellthisisgreat]

AI wouldn’t have had a future in its current form.

Or maybe Intel would be partitioning off Nvidia like the memory unit.

[bogwog]

Imagine where we'd (not) be if that happened. Acquisitions/consolidation kill innovation.

[KronisLV]

The past few years have been pretty unfortunate for Intel, even though I think they could have been a pretty decent player in the market.

Their new Core Ultra chips have pretty okay performance and good energy efficiency, their P/E core design seems to make sense, even their entry into the dedicated graphics segment seemed like a good thing for the average consumer.

But the 13/14th gen issues were a pretty major hit, I do have an Intel Arc card that I got for a really nice price (cheaper than similar AMD/Nvidia GPUs) but it's not without its own share of issues even with pretty decently developed drivers, people seem to have taken the Core Ultra being a bit of a sidegrade pretty badly and the pricing doesn't always seem all that competitive when it comes to CPUs (even the motherboards seem more expensive when compared to AMD).

What a bummer.

That said, when it comes to the consumer segment, even AMD doesn't seem to be doing all that well, for example their net revenue for gaming is down 69%: https://ir.amd.com/news-events/press-releases/detail/1224/am...

[Already__Taken]

Nvidia trying to triple graphics card prices is going to hurt the rest of the gaming markets. people still want 500/1000/1500/2k rugs and if you can't get enough upgrade in that budget you wait a generation.

[Animats]

The "Dow Jones Industrial Index" isn't that industrial any more. Six of the companies are financial. Only about half actually run factories.

[dehrmann]

And MTV doesn't play music. The DJIA is curated slice of the American economy with a goofy weighting.

[nextworddev]

This is how the dump begins. Onto the index huggers and pension funds

[bhouston]

The symbolism here is pretty nice.

[DeathArrow]

Long time ago Nvidia tried to make it's own x86 CPU but was threatened with lawsuits by Intel. Now Nvidia can buy Intel for a song.

[h2odragon]

Just buy the patents and stuff. You wouldn't want to infect a working company with the Intel disease.

I wonder how bad "worked as a manager at Intel" poisons a resume.

[AbstractH24]

I was recently looking at Intel’s performance during the dotcom bubble and then burst

If Google is the new Microsoft, is AMD the new Intel?

[eigenspace]

There's no way in hell Nvidia could buy Intel. There's more in this world than just money.

[m463]

I wonder if they have enough clout to change DJIA -> DJAI ?

[pedalpete]

Isn't Intel still the primary supplier of server CPUs? (as well as windows?)

They're taking a beating, but I feel like every few years we hear an "intel has fallen behind", and then they dust themselves off and are at the top again.

Though Nvidia can charge a huge premium for GPUs, those machines still need a CPU (if I'm wrong, please correct me).

Is anyone building ARM based servers? It looks like Intel has fought back against the Arm on Windows battle, and possibly won with their newest power saving Ultra 2s.

Do they really need to beat Nvidia?

[blinded]

Nvidia makes cpus. A ton of their server grade and network gear has arm cpus. my company almost exclusively buys amd cpus. With apple doing their own arm cpus, its doesn't leave a large market for intel.

[TrapLord_Rhodo]

I would agree with you if Intel didn't have a PE ratio of over 100. Nvidia is only at 66 and i thought that was high.

[jameslk]

DJIA is not taken very seriously outside of mainstream media it seems. The news loves to quote big drops or increases to the DJIA due to the index being price weighted. “Wow the news is saying the DJIA dropped 1000 points today! That’s huge.” Nah, that’s like 2%

This seems like another media opportunity about a nothing burger event for an index that has lost relevance, when other indices like the S&P 500 and QQQ have already incorporated NVIDIA a while ago. They’re just playing catch up.

[stocknoob]

100%. It’s a good example of how the media wants to entertain, not inform.

The DJIA is a price-weighted index and doesn’t track dividends, yet is somehow supposed to reflect investor sentiment.

[Terr_]

> DJIA is not taken very seriously outside of mainstream media it seems

AFAIK its only real utility is if you want to make very long term comparisons over the years against old values of itself, where its long baseline may be valuable compared to other metrics that don't stretch as far.

Everything else is just flim-flam for getting views/clicks or comforting very old viewers with something that is a familiar staple.

[rty32]

This could be very wrong, but I thought DJIA is relevant mostly due to WSJ? Most publications care about S&P 500, but in WSJ they always quote DJIA first (for obvious reasons) and maybe mention S&P 500.

[worstspotgain]

> nothing burger event for an index that has lost relevance

This argument has been around since time immemorial. The right way to think of it is more like a country club or a who's who, rather than a survey or a directory.

As for the news at hand, it's really more about Intel than Nvidia. Sic transit gloria mundi.

[Apocryphon]

Do any index funds track it?

[httpz]

Nobody should take Dow Jones Industrial Average seriously. It's only relevant because it's been around for 139 years. It only tracks arbitrarily selected 30 large companies and it's not even weighted by market cap.

It was made this way because 139 years ago we didn't have computers and someone had to manually calculate the average.

[knowitnone]

So you can just replace underperforming/flailing companies and still call it an average?

[ulfw]

May I suggest a merger of intel with Boeing?

Two back-in-the-day engineering driven future-forward companies and today run into the ground by Quarterly Reports And Nothing Else Matters culture and meandering around.

They'd be a lovely cultural fit.

[guerrilla]

I've been assuming that Intel will eventually catch up, because that's the world we grew up in, but that's not going to happen, is it?

[chillingeffect]

Symbolic of the times. The new wizzy guy edges out the old school lumbering giant.

[mananaysiempre]

For some value of “new”, anyway. I remember attending a talk on how GPU programming was cool and how GPGPU was the next big thing—in the mid 2000s, as a middle schooler. I don’t believe CUDA was a thing yet (looking at Wikipedia, the first release might have been several months later?), instead Cg and NV_fragment_program4 were the new hotness.

[kelnos]

Eh, not really? Nvidia is 31 years old, that's hardly new or wizzy. Sure, Intel is a bit older at 56, but I feel like Nvidia has been around more than long enough.

[tippytippytango]

A cautionary tale for Nvidia to not become the next Intel.

[markus_zhang]

Does that mean it's gonna top...

[m3kw9]

Ok so why switch?

[jruz]

Shit the top is in, time to sell NVDA and buy INTC.

Was fun ride.

[the_clarence]

Why do we care about the dow jones again?