Up 377%, Is Intel Proving Why It Was a Mistake for Nvidia to Replace Intel in the Dow Jones Industrial Average? | The Motley Fool

When Intel (INTC +3.56%) was added to the Dow Jones Industrial Average (^DJI +0.19%) in November 1999, it was a sign of the tech industry’s rising importance to the U.S. stock market — Intel and another new addition, Microsoft, were the first two stocks from the tech-heavy Nasdaq exchange to join the DJIA.

When Intel was replaced in the Dow by Nvidia (NVDA +1.90%) in November 2024, the chipmaker had lost not only market share and prestige, but also 65% of its stock value since the peak it reached in 2000 just before the dot-com bust. 

But Intel has since proved the doubters wrong. Up more than 240% year to date and about 377% since being kicked out of the Dow, Intel has now easily eclipsed its previous high. At recent prices, Intel sports a market cap of more than $640 billion — making it the 15^th most valuable S&P 500 (^GSPC +0.19%) component. What’s more, Nvidia has only gained 46% since being added to the Dow, far less than Intel.

Here’s why Intel’s 25-year stint in the Dow came to an end, and whether it was a mistake to replace it with Nvidia.

Intel’s fall

With just 30 components, the Dow has only so many seats. Each company is added for its industry leadership, but to stay in the Dow, they must continue innovating. Intel didn’t do that.

Intel has long been known for its vertically integrated model, meaning it designs and manufactures its chips, a potential source of competitive advantage if executed well. But Intel lost market…