Alphabet Joins Dow Jones Industrial Average: Here's How The Last Three Additions Performed
Amazon.com, Inc. AMZN | 0.00 | |
Alphabet Inc. Class A GOOGL | 0.00 | |
Alphabet Inc. Class C GOOG | 0.00 | |
NVIDIA Corporation NVDA | 0.00 | |
Sherwin-Williams Company SHW | 0.00 |
For the first time since November 2024, the Dow Jones Industrial Average is making changes to its 30 component holdings. With Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) set to replace Verizon (NYSE:VZ), here’s a look at the performance of the stocks that have been added and removed over the last two years.
Dow Jones Industrial Average Changes
Created by Charles Dow in 1896, the Dow Jones Industrial Average began with 12 stocks and later expanded to 30 in 1928 with a goal of covering the broader U.S. economy with the names represented in the index.
Over time, the 30 companies have changed, with the index updating every couple of years to better reflect the U.S. economy.
The latest change will happen on Monday, June 29, with Alphabet replacing Verizon. The move is the first change made by the Dow Jones Industrial Average since Nov. 8, 2024.
On that day, NVIDIA Corporation (NASDAQ:NVDA) and Sherwin-Williams (NYSE:SHW) joined the index, replacing Intel Corporation (NASDAQ:INTC) and Dow Inc (NYSE:DOW).
Since that date, here are the stock returns for the four names:
- Nvidia: +34.3%
- Sherwin-Williams: -13.8%
- Intel: +412.0%
- Dow: -40.1%
For comparison, the SPDR S&P 500 ETF (NYSE:SPY), which tracks the S&P 500 Index, is up 23.2% over the same time period.
The last change prior to November 2024 was a move in February 2024 that saw Amazon.com Inc (NASDAQ:AMZN) replace struggling drugstore Walgreens, which is now privately held.
Since Feb. 26, 2024, Amazon’s stock has been up 36.9%.
Walgreens shares lost around 42% of their value from the day they were removed from the Dow Jones Industrial Average to the day they were taken private.
The SPDR S&P 500 ETF is up 45.3% since Feb. 26, 2024.
Of the three stocks added to the Dow Jones Industrial Average in 2024, only Nvidia has outperformed the S&P 500 since it joined.
What’s Next For Alphabet, Dow Jones Industrial Average
With the latest addition to the Dow Jones Industrial Average, the index of 30 stocks may trend more towards big technology.
"Its largest market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA," S&P Dow Jones Indices said of the move.
The index company cited the advertising, cloud, AI, hardware, autonomous mobility, health care technology and media distribution segments of Alphabet as making it a strong entry in the Dow Jones Industrial Average.
Some investors may see the move as similar to one made back in March 2015 when Apple Inc (NASDAQ:AAPL) replaced AT&T (NYSE:T), with big technology knocking out a telecommunications company.
With Alphabet added, five of the Magnificent Seven stocks will now be part of the Dow Jones Industrial Average. Here are the addition dates to the index for the five stocks:
- Alphabet: June 2026
- Nvidia: November 2024
- Amazon.com: February 2024
- Apple: March 2015
- Microsoft: November 1999
With a price-weighted structure, Alphabet will have a significantly higher weighting in the index and ETFs like the SPDR Dow Jones Industrial Average ETF (NYSE:DIA). Alphabet, with shares trading around $349, is likely to be the fifth-highest weighted in the index by price, while Verizon, at $46.42, is among the bottom components by weighting.
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