Alphabet NASDAQ:GOOG shares climbed on Monday as the Google parent made its debut in the blue-chip Dow Jones Industrial Average DJ:DJI, replacing Verizon Communications NYSE:VZ, and immediately ranking among its most influential members.
Its shares rose 3.7% to $350.24, offering one of the biggest boosts to the 30-member Dow.
The company replaced Verizon on the index, S&P Dow Jones Indices said in an announcement on June 23.
As a higher-priced stock, Alphabet carries more weight in the price-weighted index than Verizon did, which was one of its least influential members, and broadens the Dow's exposure to digital advertising, cloud computing and AI.
The addition lifts to five the number of 'Magnificent Seven' members in the Dow, alongside Nvidia NASDAQ:NVDA, Amazon NASDAQ:AMZN, Apple NASDAQ:AAPL and Microsoft NASDAQ:MSFT.
The previous reshuffle in November 2024 brought in Nvidia and Sherwin-Williams NYSE:SHW in place of Intel NASDAQ:INTC and Dow Inc NYSE:DOW.
Index funds tracking the Dow must buy Alphabet to mirror the change, but the demand is likely to be modest: the Dow had about $115 billion in assets indexed and benchmarked to it as of December 31, 2024, against roughly $20 trillion for the S&P 500, where Alphabet is already a member, according to S&P Dow Jones Indices.
Alphabet shares are up roughly 11% this year, as of last close, among the best performers in the Magnificent Seven group of tech mega-caps.
The 130-year-old Dow remains one of the most widely cited gauges of U.S. market sentiment.
Verizon shares fell 7.8% to $42.03 in a broad retreat in telecom stocks after Comcast NASDAQ:CMCSA said it would split into two publicly traded companies through a spinoff of NBCUniversal and Sky.