Alphabet (NASDAQ:GOOG) will replace Verizon (NYSE:VZ) in the Dow Jones Industrial Average, with the change scheduled to take effect on June 29, according to an announcement from S&P Dow Jones Indices.
Investors responded positively to the news, with Alphabet shares rising 0.3% in premarket trading on Wednesday, while Verizon shares slipped 0.55%.
Dow Updates Membership for First Time Since 2024
The Dow Jones Industrial Average, first introduced in May 1896, is one of the oldest stock market benchmarks in the United States and is designed to track 30 leading companies across major sectors of the economy.
The inclusion of Alphabet marks the first adjustment to the index since November 2024, when Nvidia and Sherwin-Williams replaced Intel and Dow, respectively.
S&P Highlights Alphabet’s Broader Economic Exposure
In explaining the change, S&P Dow Jones Indices noted that Verizon’s relatively low share price limited its influence within the price-weighted index.
“Verizon represents only one-half of one percentage point of the DJIA due to its lower share price. The Dow Jones Industrial Average is a price weighted index, and thus persistently lower-priced stocks have an immaterial impact on the index,” S&P Dow Jones Indices said in a statement.
The index provider pointed to Alphabet’s broad exposure across multiple high-growth industries as a key reason for its selection.
“Alphabet’s diversified technology and digital services portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, autonomous mobility, healthcare technology, and media distribution,” the index provider noted.
“Adding Alphabet will broaden and strengthen the DJIA’s exposure to these dynamic areas 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,” it added.
Significant Difference in Company Size
Alphabet’s inclusion also reflects the substantial gap in scale between the two companies.
According to CompaniesMarketCap.com, Alphabet’s market value stands at approximately $4.22 trillion, compared with roughly $195.12 billion for Verizon.
The difference highlights Alphabet’s growing importance within the U.S. corporate landscape and the increasing influence of technology and digital services businesses within major market indices.
Honeywell Aerospace Will Not Join the Index
S&P Dow Jones Indices also provided an update regarding Honeywell’s planned corporate restructuring.
The index provider said that following the spin-off of Honeywell Aerospace, the parent company will remain a member of the Dow Jones Industrial Average under the new name Honeywell Technologies.
Honeywell Aerospace, however, will not be added to the index following the separation.
Technology Presence Continues to Expand
Alphabet’s addition further increases the representation of technology-driven businesses within the Dow Jones Industrial Average.
The move reflects the growing role of artificial intelligence, cloud computing, digital advertising and other technology-related industries in the U.S. economy, while also ensuring the index maintains exposure to some of the country’s largest and most influential companies.