Alphabet stock has struggled in recent weeks. News that the Google parent is set to be included in the Dow Jones Industrial Average is unlikely to provide a boost, based on previous tech company additions to the index.

Alphabet shares were little changed in early trading Wednesday and have more than doubled in the past 12 months. However, the stock is down 11% over the past month as investors question whether it is losing its edge in artificial intelligence, despite massive spending.

Shareholders might hope that the news that Alphabet will replace Verizon Communications in the Dow Jones Industrial Average -- announced late Tuesday -- will act as a reminder of its strengths. S&P Dow Jones Indices cited its AI products and exposure to "dynamic areas of the U.S. economy" as reasons for its addition.

But the peculiarities of the 30-stock Dow are likely to limit any immediate effect. Because the Dow is a price-weighted index -- meaning individual stock prices rather than market capitalizations determine the weighting of each company -- few funds choose to replicate its composition. That means there is little or no boost from forced buying, unlike when a company is added to the popular benchmark S&P 500.

For example, Nvidia and Amazon.com both joined the Dow in 2024. Nvidia fell 0.8% on the day of its addition and Amazon dropped 0.1% according to Dow Jones Market Data. There was little appreciable boost in the following weeks. In fact, Nvidia stock fell 21% over the following six months, although it has since more than recovered those losses.

If the Dow addition won't affect Alphabet stock much, it will have a significant effect on the index overall, increasing its exposure to technology stocks.

Verizon had a negligible weighting in the index due to its low stock price. In contrast, Alphabet will have a weight of about 4.0%, based on Tuesday's closing price. That will make it the seventh largest company by weighting in the index, just behind American Express. Goldman Sachs has the largest weighting, at 13% as of Tuesday's close.

Write to Adam Clark at adam.clark@barrons.com

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(END) Dow Jones Newswires

June 24, 2026 10:00 ET (14:00 GMT)

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