Shares of Alphabet Inc. (NASDAQ:GOOGL) rose 3.7% to $350.24 on Monday as the company officially began trading as a component of the Dow Jones Industrial Average, taking the place of Verizon Communications (NYSE:VZ).
The change was announced by S&P Dow Jones Indices on June 23. Alphabet's higher share price makes it one of the more influential members within the 30-stock benchmark, relative to Verizon, which ranked among the index's least influential components.
By joining the Dow, Alphabet expands the index's exposure to sectors including digital advertising, cloud computing and artificial intelligence. The addition also places Alphabet alongside four existing technology companies from the so-called Magnificent Seven group that are already in the Dow: Nvidia Corp. (NASDAQ:NVDA), Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT).
The most recent prior reshuffle of the Dow took place in November 2024, when Nvidia and Sherwin-Williams Co. (NYSE:SHW) were added to the index in place of Intel Corp. (NASDAQ:INTC) and Dow Inc. (NYSE:DOW).
Index funds and other passive vehicles that track the Dow Jones Industrial Average are required to purchase Alphabet shares to align their holdings with the reconstituted index. As of December 31, 2024, the Dow had approximately $115 billion in assets indexed and benchmarked to it, compared with roughly $20 trillion tied to the S&P 500, where Alphabet was already a constituent, according to S&P Dow Jones Indices.
Alphabet's stock performance has also been notable this year. Through the close on Friday, the shares had gained roughly 11% year-to-date, placing the company among the stronger performers within the Magnificent Seven cohort.
Clear summary
Alphabet began trading as a member of the Dow Jones Industrial Average on Monday, replacing Verizon. The move was announced June 23 and pushed Alphabet shares up 3.7% to $350.24. The change increases the Dow's representation of digital advertising, cloud computing and artificial intelligence, and requires funds that track the Dow to buy Alphabet shares. Alphabet has also gained about 11% so far this year through last Friday's close.
Impacted sectors
- Technology - increased representation in the Dow for large-cap tech firms
- Digital advertising - greater index exposure
- Cloud computing and artificial intelligence - expanded presence in the benchmark