Last week it reported third quarter results that surprised some analysts at being better that expected, only for it then to be announced that the tech ‘giant’ was to be replaced by Nvidia on the blue-chip Dow Jones Industrial Average index.
Intel has been on the index for over 25-years, but the announcement underscores a major shift in the chipmaking market, and it’ll be seen as a setback for the semiconductor firm that’s been struggling to adapt to and benefit from the boom in artificial intelligence.
Nvidia replacing Intel, once the dominant force in chipmaking, is a result of it ceding its manufacturing edge to the likes of TSMC, while at the same time missing out to Nvidia in the development and use of artificial intelligence.
Intel's shares have declined 54% this year and it’s been the worst performer on the index so the decision to drop it is no real surprise.
It’s a reputational blow to the company which is in the middle of a significant and challenging transformation of the business and when confidence in the company and its management team is at a low ebb.
Despite everything Intel talked of being optimistic about the future of its PC and server businesses but as its problems with its AI chip Gaudi have demonstrated overly optimistic forecasts don’t always match up to the reality.
