Nvidia (NASDAQ:NVDA) looks set to close out an excellent week on a high note. After blowing past Wall Street estimates, the artificial intelligence leader announced plans for a 10-for-1 stock split. This news sent Nvidia stock surging, as investors prepared for the inevitable trading frenzy that precedes a stock split.
But some analysts see another positive catalyst on the horizon for the tech sensation.
The stock split could help Nvidia secure a place on the Dow Jones Industrial Average, replacing Intel (NASDAQ:INTC). This would set an extremely positive tone for the already strong company as it prepares to rise even further in the second half of 2024.
What’s Happening with Nvidia Stock
Nvidia stock has risen 12% over the past week and looks primed to continue rising. The momentum from the Q1 earnings beat and enthusiasm for the pending stock split should be enough to keep it on an upward trajectory for the foreseeable future.
The question remains, though, can it make it onto the Dow Jones Industrial Average?
At this point, it certainly seems likely. However, it is slightly difficult to assess how likely it is, as there’s no specific number that Nvidia needs to hit. Whether or not it joins this exclusive club will depend on the committee that oversees it. As CNBC reports:
“Decisions on additions and deletions to the Dow is made by the S&P Dow Jones Indices Index Committee. There are no specific rules for inclusion or exclusion, but the committee has said that ‘a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.’”
There’s no doubt that Nvidia is a contender. Analysts are speculating that retail investors will rush to snap up shares following the Nvidia stock split. The high-growth AI stock has surged nearly 250% over the past year, demonstrating that there’s not much that can keep it down. A favorite among hedge funds, Nvidia stock currently boasts a “strong buy” rating on TipRanks, with 37 out of 40 analysts maintaining “buy” ratings.
Will Nvidia Topple Intel?
At this point, it seems inevitable that Nvidia stock will end up kicking Intel out of DJIA.
While NVDA has been rising steadily over the past year, INTC has been gradually trending downward and bleeding value. Its shares are down 35% in the year to date and are up just 6% over the past 12 months.
Intel is facing new problems due to the looming trade restrictions against certain U.S.-China trade, which will include semiconductors. Although Nvidia will face similar struggles, experts are less worried given its dominance in AI.
As is the nature of financial markets, one company’s loss is another’s gain. Investors should keep a close eye on Nvidia for Dow inclusion.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
