The Dow Jones Industrial Average ( ^DJI 0.59%) is making its second major change in 2024. Earlier this year, Amazon ( AMZN -0.89%) replaced Walgreens Boots Alliance. Now, Nvidia ( NVDA -0.84%) is swapping with Intel, and Sherwin-Williams is replacing chemical giant Dow.

Nvidia has become a member of the Dow Jones Industrial Average Friday, replacing storied chipmaker Intel as the artificial intelligence darling cements its position as the world’s most valuable company.

Nvidia Corp. may be the top dog on Wall Street in terms of market value, but in the eyes of the 128-year-old Dow Jones Industrial Average, its stock is ranked well below average.

Most indexes, like the S&P 500 and Nasdaq Composite, assign a higher weighting to the largest companies by market cap. For example, Apple has roughly 11 times the market cap of Coca-Cola, so it has a much higher weighting in the S&P 500. But in the Dow, Apple is the 12th highest-weighted company by market cap because the index is price-weighted.

The change, starting next Friday, lifts a dominant player in artificial intelligence over its chip-making rival, which has struggled to keep up.