Alphabet Debuts in Dow, Replaces Verizon
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- Alphabet debuted in the Dow Jones Industrial Average on Monday, replacing Verizon Communications after S&P Dow Jones Indices announced the swap on June 23.
- Alphabet shares rose 3.7% to US$350.24, and its higher price gives it more weight in the price-weighted Dow than Verizon, which had been among the index's least influential members.
- The Dow now counts five Magnificent Seven members — Nvidia, Amazon, Apple, Microsoft and Alphabet — broadening the 130-year-old gauge's exposure to digital advertising, cloud computing and AI after November 2024's reshuffle brought in Nvidia and Sherwin-Williams.
- Index funds must buy Alphabet to mirror the reshuffle, but demand is likely modest: the Dow had ~US$115B in indexed and benchmarked assets as of Dec. 31, 2024, against ~US$20T for the S&P 500, where Alphabet is already a member.
- Alphabet shares are up roughly 11% year-to-date, among the best performers in the Magnificent Seven group of tech mega-caps.
- Verizon shares fell 7.8% to US$42.03 as telecom stocks retreated broadly after Comcast said it would split into two publicly traded companies through a spinoff of NBCUniversal and Sky.
Why it matters: Alphabet's higher share price gives it more sway in the price-weighted Dow than Verizon did, pulling the blue-chip gauge further toward AI, cloud and digital advertising — yet the actual passive buying is small, with only ~US$115B benchmarked to the Dow versus ~US$20T for the S&P 500 where Alphabet is already a member.
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