Dow Jones Drops Verizon (VZ), Adds Near-Monopoly

Alphabet Inc. (NASDAQ: GOOGL), the parent company of Google and YouTube, is about to join one of Wall Street's most prestigious benchmarks. On June 29, before markets open, Alphabet's Class A shares will replace Verizon Communications in the Dow Jones Industrial Average — a swap that redraws the index's character in one move.

At a Glance

• GOOGL joins the Dow Jones Industrial Average on June 29, replacing Verizon Communications
• At $346.13, Alphabet becomes the sixth most influential component in the price-weighted index
• Google controls roughly 90% of global internet search traffic, per GlobalStats
• Verizon gained only 39.5% (ex-dividends) since joining the Dow in April 2004; Alphabet has rallied ~13,700% since its August 2004 IPO

Why Verizon Had to Go

The Dow is not like the S&P 500 or the Nasdaq Composite. Both of those indexes weight components by market cap; the Dow weights them by share price. That quirk matters enormously when evaluating why any given stock gets added or dropped.

Verizon's share price sat at $46.73 as of June 23 — second-lowest in the entire index. Given the current Dow divisor, that translates to just 287.7 Dow points of influence on an index that closed near 51,667. In practical terms, a big move in Verizon barely registered. S&P Dow Jones Indices, the committee that manages these compositions, also considers whether a component represents the U.S. economy and demonstrates long-term outperformance. Verizon's 39.5% gain since joining the index in April 2004 — excluding dividends — failed that test by a wide margin.

What Alphabet Brings to the Dow

Alphabet solves both problems at once. At $346.13 per share, GOOGL slots in as the sixth most influential component. More importantly, the company's business profile aligns with what the Dow's overseers want: a firm deeply woven into the U.S. economy with a clear growth trajectory.

Google's grip on internet search — roughly 90% of global traffic — gives Alphabet exceptional pricing power in digital advertising. YouTube, its video platform, ranks as the second-most-visited social site on earth. Those two properties alone make Alphabet a proxy for consumer and business activity in ways Verizon never could be.

The longer-term growth lever is cloud computing. Since weaving generative AI and large language model tools into Google Cloud, that segment's revenue growth has picked up meaningfully. Cloud carries higher margins than the advertising business, so acceleration there has an outsized effect on earnings. Alphabet will join fellow trillion-dollar Dow members Nvidia, Microsoft, and Amazon when the change takes effect.

What the Numbers Say

GOOGL closed at $346.13 on June 21, off 0.43% for the session, and sits well inside its 52-week range of $295.18 to $408.61. The stock is trading closer to its annual low than its high — a gap of roughly $62 to the downside and $62 to the upside from current levels.

The P/E ratio stands at 31.73, with earnings per share of roughly the implied figure from that multiple. For a company commanding a $4.49 trillion market cap and near-monopoly positioning in search, that valuation sits in territory some analysts consider reasonable rather than stretched — though it remains firmly in growth-stock territory. The dividend yield is just 0.25%, so income investors won't find much here; this is a capital-appreciation story.

The RSI reading of 37.25 puts GOOGL in oversold territory by conventional technical standards (below 40 is generally considered weak momentum). That can signal either a buying opportunity or a stock under genuine selling pressure — the distinction usually depends on whether the broader market is also retreating or whether company-specific concerns are driving the move.

Bull case: Alphabet's dominance in search is effectively a structural moat. Google Cloud's AI-driven reacceleration, combined with YouTube's advertising reach, gives the company multiple high-margin revenue streams. Dow inclusion may also attract passive index-tracking inflows.

Bear-case risks: Regulatory scrutiny of Google's search monopoly is ongoing and could eventually constrain ad-pricing power. AI competition from rivals — particularly in search — threatens what has historically been an unchallenged position. A broad market pullback would weigh heavily on a $4.49 trillion name with a P/E above 30.

Frequently Asked Questions

When does Alphabet officially join the Dow Jones Industrial Average?

Alphabet's Class A shares (GOOGL) join the Dow on June 29, 2026, effective before trading begins that day. Verizon Communications will be removed at the same time.

Why does share price matter for Dow inclusion?

Unlike the S&P 500, the Dow Jones Industrial Average is price-weighted, meaning a stock's raw share price — not its market cap — determines how much influence it has on the index's daily moves. Alphabet's $346 price gives it substantially more sway than Verizon's sub-$47 shares.

Does Alphabet's Dow inclusion affect GOOGL's stock price directly?

Index inclusion can generate buying from funds that track the Dow, which may support the share price around the changeover date. Beyond that initial period, the stock's performance will continue to reflect Alphabet's underlying business results.

What is Alphabet's dividend yield?

GOOGL currently yields 0.25%, meaning it pays a modest dividend but is not structured as an income stock. The company's investment appeal is centered on earnings growth rather than yield.

A Redrawn Index

The Dow has swapped components more than 50 times since 1896, and each change reflects where economic gravity has shifted. Replacing a flat-performing telecom with a company that has compounded at roughly 13,700% since its 2004 IPO is less a bet on the future than an acknowledgment of the present — the internet economy is the economy, and Alphabet sits at its center.