Intel Faces Potential Dow Jones Removal After 60% Stock Drop in 2024

Intel's stock has plummeted nearly 60% this year, putting the company at risk of being removed from the Dow Jones Industrial Average. As Intel prepares a revival plan, the potential loss of this blue-chip status could further impact its market position.

Intel’s Persistent Stock Decline Could Lead to Dow Jones Removal, Threatening Vital Passive Inflows

Intel's stock price trajectory has become increasingly predictable: the stock declines on up and down-market days. This consistent underperformance, leading to a nearly 60 percent drop in Intel's shares this year, puts the stock at risk of losing a key source of passive inflows—the Dow Jones Industrial Average (DJIA) index.

According to a recent report from Reuters, Intel is likely to be removed from the Dow Jones index. The DJIA rebalances quarterly, systematically adding or removing stocks based on a comprehensive set of criteria. If Intel is removed, it would be a significant blow for the company, as it has been one of only two tech stocks, alongside Microsoft, to join the Dow Jones during the dot-com bubble of the 1990s. Losing its place in this prestigious index would strip Intel of a vital source of passive funding that typically benefits blue-chip stocks, potentially exacerbating the stock's decline.

This development coincides with Intel's preparation for a broad-based revival plan, which it plans to present at its upcoming board meeting. Reports indicate that the company is considering unloading its majority stake in its FPGA arm, Altera, and freezing construction on its $30 billion facility in Germany. However, Intel is not expected to divest its chip manufacturing division, Intel Foundry.

Intel Engages Morgan Stanley for Strategic Guidance Amid Financial Cuts and Activist Investor Pressure

Intel is reportedly working closely with several financial advisers, including Morgan Stanley, to explore strategic options for its board meeting. These advisers, with their expertise and experience, are crucial in helping the company navigate a rumored high-profile challenge from activist investors.

Intel has taken several measures to ensure financial stability. The company has cut its dividends and reduced its workforce by 13.6 percent, laying off approximately 15,000 employees at the start of the year. It has also slashed its capital spending for 2025 by 17 percent, bringing it down to $21.5 billion.

As of the latest trading session, Intel shares have dropped by around 6 percent, leaving the company's market capitalization at $89.30 billion.