In Tuesday trading, Intel shares experienced a significant drop, extending their ongoing slump in 2024. Reports emerged suggesting that the chipmaker might be excluded from the Dow Jones Industrial Average in the coming months. Intel (INTC), which has witnessed a loss of over $210 billion in market value since its pre-pandemic peak in January 2020, remains the worst-performing stock in the benchmark index and ranks lowest among the 30 companies on the price-weighted index.

According to Reuters, Intel shares have plummeted by more than 56% this year and are now trading roughly 29 times lower than UnitedHealth (UNH), the heaviest-weighted stock in the Dow. S&P Dow Jones Indices, the index manager, usually reviews stocks that are trading at around 10 times lower than the top-weighted stock. Considering this criterion, Intel's future in the index appears uncertain.

S&P Dow Jones Indices has previously made changes to its bellwether index, removing big-name stocks. In 2015, AT&T (T) was replaced by Apple following the latter's 7-for-1 stock split in June 2014. Earlier this year, Walgreen Boots Alliance (WBA) was replaced by tech giant Amazon (AMZN). Therefore, there is a possibility that Intel, being the first tech company ever included in the Dow, could be replaced by another significant player in the sector, with chipmaker Nvidia being a top candidate.

Nvidia (NVDA), with a market value of around $2.75 trillion, is the third-largest stock in the S&P 500. This month, it announced a 10-for-1 stock split, leading analysts to suggest that it could be a suitable addition to the Dow Jones Industrial Average. Jay Woods, chief global strategist at Freedom Capital Markets, stated, "Considering Nvidia's significance in the American economy and market weighting, it would make sense for them to be added to the mighty Dow 30."

However, regardless of its inclusion in the Dow, Intel continues to grapple with its own challenges. The company, which joined the Dow in late 1999, faces uncertainties surrounding its long-running turnaround under CEO Pat Gelsinger. Intel aims to expand its AI-focused business by developing chips for next-generation laptops and client-based servers. Additionally, it is involved in a contract chip-foundry venture linked to President Joe Biden's Chips Act legislation.

Nevertheless, managing both ambitions has proven difficult for Intel, as bloated chip inventories and losses in its foundry division have weighed down profits. The company's second-quarter earnings report did little to improve the situation. With adjusted profits falling short of Wall Street expectations and revenues declining, Intel faces a challenging road ahead.

Looking ahead, Intel anticipates revenue in the range of $12.5 billion to $13.5 billion for the current quarter, which falls below the forecast of $14.35 billion. The company also revealed plans to reduce its global workforce by 15%, amounting to over 15,000 employees, and suspend its quarterly dividend. As further steps to address its situation, CEO Pat Gelsinger is expected to present cost-cutting measures and potential asset sales to the Intel board later this month, with Morgan Stanley and Goldman Sachs providing advisory services, as reported by Reuters.

In Tuesday afternoon trading, Intel shares experienced a 7.7% decline, reaching $20.32 per share. If the downward trend continues, the stock's decline for 2024 could reach approximately 57%. Nvidia shares also suffered a drop of 7.7%, with each share priced at $110.13.

The future of Intel in the Dow Jones Industrial Average remains uncertain as the company strives to navigate its challenges and regain its strength in the ever-evolving chip industry.