Intel’s Potential Dow Jones Exit Signals Troubled Times for Chipmaker

In a stunning turn of events, Intel Corp (INTC), once a titan of the tech industry, may soon face ejection from the prestigious Dow Jones Industrial Average (^DJI). This potential development, reported by Reuters, comes as a stark reminder of the chipmaker’s recent struggles and could mark a significant blow to its reputation.

Intel, which joined the Dow alongside software giant Microsoft (MSFT) during the dot-com boom of 1999, has seen its fortunes wane dramatically in recent years. The company’s share price has plummeted nearly 60% this year alone, making it the Dow’s worst performer and leaving it with the lowest stock price in the price-weighted index.

“Intel’s removal was likely a long time coming,” Ryan Detrick, chief market strategist at the Carson Group, told Reuters. “The latest results may be the final push needed to finally see the company removed from the Dow.”

The potential exclusion from the blue-chip index comes at a particularly challenging time for Intel. The company has largely missed out on the artificial intelligence boom, a decision that has proven costly in hindsight. Additionally, its contract manufacturing unit, developed to challenge Taiwan Semiconductor Manufacturing Co (TSMC34.SA), continues to accumulate losses.

In response to these mounting pressures, Intel has taken drastic measures. During its most recent earnings report, the company announced a suspension of its dividend and layoffs affecting 15% of its workforce. However, some analysts and even a former board member suggest these actions may be insufficient to right the ship.

The chipmaker’s market value has dipped below $100 billion (at last check, market cap was printing $89 billion/$20.90 p/sh) for the first time in three decades, with its shares down more than 70% from their August 2000 peak. This dramatic decline serves as a stark reminder of how far Intel has fallen from its once-dominant position in the tech landscape.

As Intel grapples with these challenges, its potential removal from the Dow Jones Industrial Average looms large. Such a move would not only symbolize the company’s diminished status but could also trigger further selling pressure on its already beleaguered stock.

The tech industry watches with bated breath as this once-mighty chipmaker fights to regain its footing in an increasingly competitive and rapidly evolving market. Whether Intel can engineer a turnaround remains to be seen, but one thing is clear: the road ahead will be far from easy for this former tech darling.

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