According to reports, Intel will be replaced by Nvidia on the blue-chip Dow Jones Industrial Average index after a 25-year run, underscoring the shift in the chip making market and marking another setback for the struggling semiconductor firm.

Nvidia will join the index next week along with paint-maker Sherwin-Williams, which will replace Dow, S&P Dow Jones Indices says.

Once the dominant power in chip making, Intel has in recent years shed its manufacturing edge to rival TSMC and missed out on the generative artificial intelligence boom following blunders included passing on an investment in ChatGPT-owner OpenAI.

With a 54 percent drop in its stock price this year, Intel is now the index's weakest performance and has the lowest stock price on the price-weighted Dow.

Shares of Intel fell 1.6 percent in extended trading, while those of Nvidia were up 2.2 percent.

This comes a day after Intel said it was optimistic about the future of its server and PC businesses, predicting revenue for the current quarter to be higher than expected but cautioning that it still had "a lot of work to do."

"Losing the status of Dow Jones inclusion would be another reputational blow for Intel, as it grapples with a painful transformation and loss of confidence," says Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Prior to transitioning to processors that aided in the emergence of the personal computer industry, the Silicon Valley pioneer, founded in 1968, supplied memory chips.

Commodity electronic components were transformed into high-end goods in the 1990s by "Intel Inside" stickers, which later became commonplace on laptops.

In 2023, Intel's sales was $54 billion, which was almost a third less than in 2021, the year Pat Gelsinger became CEO. Analysts predict that this year will mark Intel's first yearly financial loss since 1986.

For the first time in thirty years, the company's value is below $100 billion.

That is nothing compared to Nvidia, which is currently the second most valuable corporation in the world with a valuation of $3.32 trillion.