The Dow Jones Industrial Average (^DJI 0.40%) has been an interesting market to follow in recent years. The venerable market benchmark didn't see the sharp gains that other, more tech-heavy indexes enjoyed during late 2020 and 2021, but the Dow didn't lose as much ground in the bear market of 2022 either. As a result, the Dow isn't that far below its all-time record high, and some bullish investors are optimistic that the average could reach new heights in the not-too-distant future.
However, some Dow components haven't been carrying their weight lately. Both Walt Disney (DIS -0.04%) and Intel (INTC -9.20%) have gone through more than their fair share of struggles, and the most recent news from the two companies had investors wondering what the future will bring. Here's what Disney and Intel are saying about their businesses and how investors are reacting.
Disney looks to spiff up its parks
Shares of Disney dropped almost 4% on Tuesday. They were set for a modest bounce on Wednesday morning, but the stock is down almost 10% on the year even with the Dow having seen gains.
Disney revealed its latest strategy for its parks, experiences, and products segment in a filing with the U.S. Securities and Exchange Commission on Tuesday. The entertainment giant said that it expects its capital expenditures for the segment to nearly double from what it has spent over the past 10 years. That means that Disney will likely spend around $60 billion over the next decade as it expands and enhances its domestic and international park properties. The company also intends to increase its cruise line capacity, catering to a resurgence in demand and seeking to capitalize on its highest-value growth opportunities.
Disney remains convinced that it has the capital to finance this big investment, but shareholders didn't seem as comfortable with the strategy. Investors in Disney are already concerned about the impact that streaming video has had on its media business, with legacy network properties having come under pressure. Meanwhile, the Disney+ streaming project has had considerable success, but it's still losing money, and competitive pressures in streaming could make it hard for Disney to claw out a profit from that business in the near future.
The long-term prospects for Disney seem as sound as ever, but the company has to work hard to get through this current period of uncertainty. Until it does, shareholders can expect the stock to remain volatile.
Intel aims at AI
Shares of Intel came under even more pressure, falling more than 4% on Tuesday and easing further downward at the open on Wednesday morning. The semiconductor chip manufacturer has had a tough time keeping up with the pace of innovation, and its latest pronouncements had some investors wondering if Intel could make good on its promises.
Intel held its innovation conference on Tuesday, making several comments about product launches and other aspects of its business. Among current projects is a new chip that should be able to help users run generative artificial intelligence (AI) programs on a laptop, avoiding the need for more powerful cloud-based data centers. In addition, a new data center processing chip should be available by December, along with other advanced architectures that could be helpful in AI development.
However, Intel CFO David Zinsner still warned that revenue from its data center segment is still likely to be down from year-earlier levels. It could take another year before Intel becomes cash-flow-positive, which is stretching investors' patience pretty thin.
Intel hasn't been able to keep up with other players in the semiconductor space. It seems increasingly likely that Intel has permanently ceded its leadership position in chips to rivals, and some believe that its days as a Dow component are numbered.
