Nvidia in, IBM or Intel out?

FRI, MAY 21, 2021

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF FRI, MAY 21, 2021 • 11:06 ET

DJIA		34348.24
		+0.77%	+264.09

S&P 500		4177.07
		+0.43%	+17.95

NASDAQ		13532.67
		-0.02%	-3.07

EDITOR'S NOTE

I'm tired today and I don't feel like thinking about crypto (although I *highly* recommend watching the interview that aired just now with MicroStrategy CEO Michael Saylor), or inflation (although we will have a great discussion with Dave Zervos and Steve Liesman about that at 1 p.m.).

So let's talk about Nvidia's stock split! Or rather, let me let our brilliant markets producer Robert Hum talk about it. Why do we care? Because it just miiiight open the door for Nvidia to join the Dow.

Robert: "NVIDIA announced a 4-for-1 stock split this morning. The stock is trading up 3%...topping $600. That would put the stock around $150 post-split, which will be effective July 20. At NVIDIA's current pre-split price, it wouldn't be very feasible for it to join the Dow (UnitedHealth, trading around $416, currently has the greatest weighting). But at a post-split $150 price, the story is very different."

Now, what might Nvidia replace? Well, both IBM and Intel could be candidates, since companies typically supplant others within their same sectors. "IBM's Dow weighting is right around the same level as what NVIDIA's would be. That could be an ideal candidate, particularly since IBM is in the process of spinning off its Global Technology Services division at the end of the year," Robert writes.

Or, in what would surely be a sore point for the incumbent, Nvidia could replace chip rival Intel, although Intel is only a $56 stock, so that might not technically work out as well. Same for Cisco, which Robert notes Nvidia could also supplant, but is only trading around $52 a share.

Nvidia's ascent has been one of the most incredible business (and investing) stories of the past decade. It's almost become an oversight for them not to be included in the blue-chip 30. Nvidia's now a $375 billion company, whereas recent Dow addition Salesforce is only $207 billion in size. Intel is only $228 billion in size, while IBM is a $129 billion company about to shrink further after its spinoff. (And thanks again to Robert for having all these stats at his fingertips.)

More thoughts on all this coming up in Rapid Fire. Have a great day and a great weekend!

Kelly

Kelly Evans
Twitter: @KellyCNBC

Instagram: @realkellyevans

KEY STORIES

Stocks making the biggest moves in the premarket: VF Corp, The Buckle, Palo Alto Networks & more

The stocks making the biggest moves in premarket trading include VF Corp, The Buckle, Palo Alto Networks, and more.

Why Asian Americans on Wall Street from Goldman Sachs to Wells Fargo are breaking their silence

Asian Americans at Goldman Sachs and beyond are pushing back against the stereotype that they are merely quiet, docile workers.

Bitcoin falls after China calls for crackdown on bitcoin mining and trading behavior

Bitcoin's price tumbled Friday following an intensified call from Chinese authorities to crack down on mining of the cryptocurrency.

4 reasons you may want to buy Apple ahead of its annual developers conference

Apple's stock could rally by as much as $60 in the near term, says TradingAnalysis.com founder Todd Gordon.

Barry Diller says Apple 'overcharged in a disgusting manner' his companies on App Store

Barry Diller, chairman of IAC and Expedia, told CNBC that Apple's App Store policies are excessive and should be considered "criminal."

Off-the-grid homes are coming to your neighborhood, as climate change creates suburban survivalists

Increasingly extreme weather from climate change is now a year-round phenomenon. This has homebuilders reconsidering how they design and power new homes.