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Nvidia to join Dow Jones Industrial Average, replacing Intel
- the_clarence 2y agoWhy do we care about the dow jones again?
- deleted 2y ago[deleted]
- talldayo 2y ago> Intel shares were down 1% in extended trading on Friday. Nvidia shares rose 1%. Riveting
- jameslk 2y agoDJIA 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.
- Terr_ 2y ago> 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.
- Apocryphon 2y agoDo any index funds track it?
- phil21 2y agoQuite a few, pretty much every major ETF provider should have one. I recall Vanguard not, and a quick google seems to confirm that. I do wonder why? The one I know of off the top of my head is DIA.
- staticman2 2y agoThe dow is price weighted. Vanguard, being a sort of non profit, probably doesn't want people investing in an obviously horrible index that should have gone away decades ago.
- Ekaros 2y agoThey don't care about people investing in losing bets. But they care about wasting resources on running stuff that does not sell. And not having a plus followed by big number and percentage sign in column next to name is bad seller. In the end how funds are marketed and presented is important part to understand. Also it is better for them to sell actively managed fund with bigger number on it than index with negative one.
- quickthrowman 2y ago> I recall Vanguard not, and a quick google seems to confirm that. I do wonder why? It’s a crappy price weighted benchmark with 30 stocks invented over 100 years ago, that’s why Vanguard doesn’t offer a fund. The largest DJIA ETF is small potatoes, SPY’s average daily volume is higher than DIA’s total assets under management. VOO tracks the S&P 500 and VTI tracks the US total market, both of these are much better, more diversified options for equity investing.
- stocknoob 2y ago100%. 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.
- bradleyjg 2y agothe media wants to entertain, not inform The media wants to not go bankrupt. It’s the customers that decide whether and how that’s possible.
- thimabi 2y ago> The media wants to not go bankrupt. I’d say that depends. Many media organizations operate without profits — or even incurring losses — in order to serve the public good, promote an ideology, engage in activism, spread misinformation, etc.
- hackernewds 2y agospread misinformation? which major media operations are operating at a loss how for the public good (discounting state run) and how?
- thimabi 2y ago> spread misinformation? Yes, several state-run and private media organizations operate without profits or at a loss in order to spread misinformation. > which major media operations are operating at a loss how for the public good (discounting state run) and how? Sorry, I was unable to properly understand your question. In any case, I never said the organizations that are not primarily concerned with chasing profits are “major” ones. I believe that applies best to lesser-well-known entities, like those who live on social media or the blogosphere. Though there are some instances of major state-run companies, even on TV and on the radio, that operate in a similar fashion. Also, I am surely not equating the spread of misinformation with serving the public good — these are just distinct objectives that may be sought by media organizations, rather than avoiding bankruptcy.
- worstspotgain 2y ago> 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.
- lotsofpulp 2y agoIntel hasn’t been in the country club for 10+ years.
- worstspotgain 2y agoIf you exclude its pre-Athlon Nvidia-like era, Intel's market cap earlier this year was only ~20% below its 2020ish peak. It has engineers. It might yet surprise. Nvidia hasn't proven it can turn a ridiculous amount of capital into a matrix-multiplication moat.
- rty32 2y agoThis 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.
- anonu 2y agoThe Dow Jones corp used to own the index and the newspaper prior to the mid 2000s. Now, News Corp runs the WSJ and the index is mostly owned and run by S&P. So there is a historical connection and probably some legacy ownership today.
- chillingeffect 2y agoSymbolic of the times. The new wizzy guy edges out the old school lumbering giant.
- mananaysiempre 2y agoFor 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 2y agoEh, 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.
- markus_zhang 2y agoDoes that mean it's gonna top...
- bhouston 2y agoThe symbolism here is pretty nice.
- m463 2y agoI wonder if they have enough clout to change DJIA -> DJAI ?
- MengerSponge 2y agoOnly if they can make it French too
- knowitnone 2y agoSo you can just replace underperforming/flailing companies and still call it an average?
- kristopolous 2y agoYes that's how it's always worked https://en.m.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Industrial_Average https://en.m.wikipedia.org/wiki/Historical_components_of_the...
- tedsanders 2y agoAccording to this, the original DJIA was 11 stocks, comprising 9 railroad companies, 1 steamship company, and 1 telegraph company. Capital was deployed very differently 140 years ago.
- dredmorbius 2y agoIt was and wasn't. Those were the telecoms, transport, and infrastructure companies of their day. They connected the industrial and agricultural output of the United States in much the way Apple, Amazon, Boeing, Verizon, and Walmart (all current components of the DJIA) do today. That said, yes, it's interesting to watch how the components and industrial sectors represented change over time. The first DJIA proper (26 May 1896) featured cotton oil, sugar, tobacco, gas & coke (coal), cattle feed, electrical utility, lead, railroads, leather, rubber, and a holding company (trust) largely engaged in utilities and transportation, and dropped later the same year, along with US Rubber. Changes to the average have been a consistent feature to its origins. Think of those which aren't directly comparable to modern concerns (e.g., oil & gas, electric utilities) as raw materials (mining and ag), transport and logistics, and food (or feed).
- RobRivera 2y agoIts not a market average, its an average of members curated by an arbitrary set of rules. Many exist. This is how it has always been.
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- nextworddev 2y agoThis is how the dump begins. Onto the index huggers and pension funds
- bhouston 2y agoYou are correct, this will affect both Intel and NVIDIA's stock prices, although it may already have been baked in depending how predictable this was. Index funds are big business. Dropping Intel and replacing it with NVIDIA will cause a rebalancing of the DJIA index fund investments from Intel to NVIDIA. Yup, there is an index premium.
- khuey 2y agoMajor index funds don't follow the DJIA. $DIA has 5% of $SPY's assets under management.
- nextworddev 2y agoThat’s half the story, there’s a lot of private funds that passively track as well, it just comes down to what’s the net flow due to rebalance of public + private indices. Could be a lot, could be that much
- bhouston 2y agoDIA has ~$35.62 billion, IYY has ~$2.5B in the DJIA. There are only 30 companies in it (~$12T total value), so it averages $1.1B per company. But the S&P 500 index funds has somewhere around ~$2.5T invested, but that is spread across 500 companies (~$40T total valuation), so it averages $5B per company. Thus you are correct the S&P 500 is more influential in terms of index fund reallocations, but only roughly 5x more influential.
- sooheon 2y agoPut another way, IYY and DIA combined hold <0.1% of NVDA's market cap.
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- insane_dreamer 2y agoIntel'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 2y agoNvidia would've acquired the culture of Intel, so it wouldn't be the company it was today if that happened.
- insane_dreamer 2y agoNot sure that would have mattered once LLMs emerged. NVidia's success is mostly a matter of being the only major advanced GPU player at the time when LLMs exploded onto the scene. That won't be the case for long. The big players are already heavily investing in high performance AI chips to wean themselves off a dependance on NVidia.
- kiratp 2y agoNvidia’s success is due to a decade+ of investment into their software stack (CUDA and friends), built on a world view that more software can and should be massively parallel. They were a key cause for LLMs being a thing in the first place.
- BobbyJo 2y agoThis. I worked in HPC between 2010 and 2013, and people were trying to compete with NVidia in the GPGPU space even back then, seeing the way the wind was blowing. Compute bandwidth, and FLOPS/watt has steadily been more and more important the last 15 years, even before AI. NVidia has continued to stay ahead because every alternative to CUDA is half baked trash, even when the silicone make sense. As a tech company, trading $$ for time not spent dealing with compatibility bugs and broken drivers pretty much always makes business sense.
- Animats 2y agoThe "Dow Jones Industrial Index" isn't that industrial any more. Six of the companies are financial. Only about half actually run factories.
- dehrmann 2y agoAnd MTV doesn't play music. The DJIA is curated slice of the American economy with a goofy weighting.
- wodenokoto 2y agoFor what it's worth, they have MTV MEA running in my local gym and it plays nothing but music all the time.
- m3kw9 2y agoOk so why switch?
- httpz 2y agoNobody 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.
- ulfw 2y agoMay 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.
- tippytippytango 2y agoA cautionary tale for Nvidia to not become the next Intel.
- guerrilla 2y agoI'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?
- DeathArrow 2y agoLong 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 2y agoJust 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.
- result2vino 2y agoCertainly less than the HN sewing circle (yourself included) would think. People that actually know what they’re doing tend to make more informed and nuanced decisions than beating on their chest and yelling “Intel bad!”
- h2odragon 2y agoI have Nothing against anyone who does the best they can in a bad situation. Observing Intel, my feeling has been that "best you can" has been "bail out" since just after the PPro. The company has worked hard to waste a whole generation of talent and possibility. It took immense effort. Anyone who looks at that performance and says "I was proud to be part of that" is not someone who will be happy working beside me, anyway.
- FredPret 2y agoI don’t know - there are a couple of companies that are a red flag on a resume. Some companies get results, and some specialize in Powerpoint and politics. It all comes down to the managers in charge. Would you hire a VP/manager that spent too much time at IBM or similar? How long can you work there without getting infected?
- eigenspace 2y agoThere's no way in hell Nvidia could buy Intel. There's more in this world than just money.
- jruz 2y agoShit the top is in, time to sell NVDA and buy INTC. Was fun ride.
- Havoc 2y agoThat’s assuming intel can sort itself out. I’m not entirely convinced
- anonu 2y agoThe 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.
- bluGill 2y agoThe 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.
- makeitdouble 2y agoIn this day and age we could skip all of that and report on the actual average of all the stocks in the exchange, instead of only a fraction.
- david-gpu 2y agoSP500 represents something like 85% of market capitalization. Adding a few more thousand stocks would make little difference, especially when you consider how heavily correlated they are. Just compare SPY with VT -- nearly the same thing.
- dmoy 2y agoMinor nit: SPY and VTI are 80-85% the same thing VT includes a ton of non-US stocks and is significantly different
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- KronisLV 2y agoThe 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/amd-reports-third-quarter-2024-financial-results https://ir.amd.com/news-events/press-releases/detail/1224/am...
- Already__Taken 2y agoNvidia 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.
- pedalpete 2y agoIsn'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 2y agoNvidia 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.
- ywvcbk 2y ago> doesn't leave a large market for intel. And yet Intel still had 3/4 of datacenter the market by volume at least a few months ago… Of course they are struggling with maintaining their margins.
- TrapLord_Rhodo 2y agoI 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.
- deleted 2y ago[deleted]
- ywvcbk 2y agoIntel has a high PE because they its barely profitable (in fact they operate at a loss currently). Nvidia because investors expect it to continue growing at an extremely fast pace. These are fundamentally different (even if they had the same PE it wouldn’t be comparable).