Alphabet's stock is set to join the Dow, pivoting index's industrial roots toward tech

By Claudia Assis and Joy Wiltermuth

As Alphabet rolls out more data centers - and borrowing money to do it - it can be argued that it is becoming more of an industrial company, says strategist

Google parent Alphabet is going to replace Verizon in the Dow Jones Industrial Average.

Alphabet will replace Verizon Communications in the Dow Jones Industrial Average, index provider S&P Dow Jones Indices said late Tuesday, tilting the historic U.S. equity benchmark deeper toward the technology sector. It will no longer have a component representing telecoms.

S&P Dow Jones Indices hailed the Google parent's (GOOG) (GOOGL) technology portfolio, and said that adding the company to the Dow DJIA "will broaden and strengthen" the index's exposure to "dynamic" sectors of the U.S. economy. "Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative communication services constituent in the DJIA," the provider said.

The changes are effective before the open on Monday, June 29. Shares of Alphabet rose 0.5% in the extended session Tuesday, after ending the regular trading day down 1%. Verizon's stock (VZ) dropped less than 1% after hours, after closing 3% higher in the regular session.

"The telecom 'era' likely ended a while ago, and the inclusion of Alphabet in the Dow is more of a reflection of the quality of Alphabet and its expectation to sustain growth and be a leader in its industry," said Ayako Yoshioka, a senior investment strategist at Wealth Enhancement.

Whatever "industrials" means in the modern sense, "it isn't smokestack industries," said Interactive Brokers Chief Strategist Steves Sosnick.

"I'm not going to say the Dow Jones is becoming the ["Magnificent Seven"], but it's certainly becoming more of that flavor," Sosnick said. "It does make it harder to avoid tech."

One could argue, however, that as Alphabet rolls out more data centers - and borrows money to do it - that it is becoming more of an industrial company, he said.

"Maybe this is the 21st-century industrial economy," Sosnick said. To be sure, however, the Dow and its 30 components are largely symbolic, he added - the money passively invested in the index is a "tiny fraction" of amounts invested in the broader S&P 500 SPX or the Nasdaq 100 NDX, he said.

"The symbolism is very important, but the actual investing ramifications of it are really not," Sosnick said.

Tuesday's changes come less than two years after Nvidia (NVDA) joined the Dow in late 2024, and after Amazon.com (AMZN) replaced Walgreens Boots Alliance earlier that year.

Changes in 2020 ushered in Salesforce (CRM), which replaced energy giant Exxon Mobil (XOM), among other changes. The market at the time took it as a symbolic loss of cachet for the energy sector, currently represented on the Dow only by Chevron Corp. (CVX).

The move also arrives as Alphabet's shares have been under pressure, down for two straight days including Monday's biggest one-day decline in more than a year and a record loss of market capitalization as investors worried about the company's recent loss of talent in the artificial-intelligence space.

-Claudia Assis -Joy Wiltermuth

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06-23-26 2025ET