Alphabet shares GOOG rose 1.8% on Wednesday after S&P Dow Jones Indices announced that the Google parent will replace Verizon Communications in the Dow Jones Industrial Average (DJIA) ahead of the opening of trading on June 29.

The move will also result in changes to the S&P 500, with Honeywell Aerospace set to replace Conagra Brands on the same date.

The update marks one of the most significant changes to the 30-stock Dow in recent years and increases the index’s exposure to large-cap technology companies.

Following the adjustment, five of the so-called Magnificent 7 companies will now be included in the benchmark.

S&P Dow Jones Indices said Verizon’s low share price meant it had an “immaterial impact” on the price-weighted index.

Alphabet, by contrast, has a stock price of around $350 compared with Verizon’s roughly $47, making it more influential in a price-weighted structure such as the Dow.

Tech representation in the Dow expands with Alphabet inclusion

The Dow Jones Industrial Average is a price-weighted index, meaning companies with higher share prices carry greater influence regardless of market capitalization.

As a result, Alphabet is expected to account for approximately 4.0% of the index based on Tuesday’s closing price, making it the seventh-largest component.

S&P Dow Jones Indices said in a press release that “Alphabet’s diversified technology and digital services portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, autonomous mobility, healthcare technology, and media distribution.”

It added: “Adding Alphabet will broaden and strengthen the DJIA’s exposure to these dynamic areas of the US economy.”

Both Alphabet and Verizon are classified as communications stocks by S&P Dow Jones.

The inclusion also reflects a broader shift in the Dow’s composition over recent years.

Nvidia and Sherwin-Williams were added to the index in November 2024, replacing Dow Inc. and Intel.

After the latest change, most major technology companies—including Alphabet, Microsoft, Apple, Amazon.com and Nvidia—will be represented in the Dow.

Honeywell International will remain in the index following the spinoff of Honeywell Aerospace.

Limited short-term impact expected on Alphabet stock

Despite the announcement, Alphabet’s share price reaction is expected to be limited.

The stock has fallen about 11% over the past month amid investor concerns about its artificial intelligence strategy and heavy spending.

Market history suggests index additions to the Dow do not typically generate sustained share price gains.

Because the Dow is not widely tracked by passive funds in the same way as the S&P 500, there is little forced buying pressure when companies are added or removed.

When Nvidia and Amazon.com joined the Dow in 2024, both stocks saw muted immediate reactions, with Nvidia falling 0.8% and Amazon slipping 0.1% on the day of inclusion, according to Dow Jones Market Data.

While the direct impact on Alphabet shares may be limited, the inclusion underscores the increasing dominance of large technology companies in major US equity indices and the continued rebalancing of traditional benchmarks toward the tech sector.

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