Google parent Alphabet debuts in Dow Jones index in tech tilt

Google parent Alphabet's shares entered the Dow Jones Industrial Average on Monday, in an index reshuffle replacing Verizon Communications, signalling a tech tilt in the blue chip benchmark.

Alphabet shares rose 3.7% to $350.24 after the stock listed on the DJI and ranked among its most influential members.

As a higher-priced stock, Alphabet will carry greater weight in the price-weighted Dow than Verizon, one of the index's least influential components. Its inclusion also increases the Dow's exposure to digital advertising, cloud computing and artificial intelligence, according to a Reuters report.


Alphabet's entry raises the number of 'Magnificent Seven' companies in the Dow to five, joining Nvidia, Amazon, Apple and Microsoft.
The last Dow reshuffle, in November 2024, saw Nvidia and Sherwin-Williams replace Intel and Dow Inc.

Funds tracking the Dow will need to add Alphabet to reflect the index change. However, the buying impact is expected to be limited, as about $115 billion in assets were indexed or benchmarked to the Dow as of December 31, 2024, compared with nearly $20 trillion tracking the S&P 500, where Alphabet is already a constituent, according to S&P Dow Jones Indices.

Alphabet shares have gained about 11% so far this year, as of the previous close, making them one of the strongest performers among the Magnificent Seven technology stocks.

Despite its selective composition, the 130-year-old Dow remains one of the most closely watched barometers of U.S. stock market sentiment.
Verizon shares dropped 7.8% to $42.03 amid a broad selloff in telecom stocks after Comcast announced plans to split into two publicly traded companies through the spinoff of NBCUniversal and Sky.

(With angecies inputs)