Alphabet’s entry into the Dow Jones marks a new stage in the domination of the technology sector within the historic Wall Street index.
Alphabet, Google’s parent company, will join the famous Dow Jones index, where it will take the place of the American telecoms operator Verizon. This decision, which will take effect on June 29 before the opening of the New York Stock Exchange, further confirms the weight of the technology sector in the American economy.
A turning point for the Dow Jones
S&P Dow Jones Indices, which manages the composition of the basket, announced this change on Tuesday. The last modification of the Dow Jones Industrial Average (DJIA), the full name of the index, dated from November 2024 with the entry of Nvidia and Sherwin-Williams (paints and coatings) instead of Intel and Dow.
At 130 years old, the Dow Jones, which has 30 stocks, is, by far, the oldest index on Wall Street. None of the original members of the DJIA are still part of it. General Electric held out the longest, before exiting in 2018.
The Dow Jones is considered by professionals to be of little relevance, due to its composition but also because the weighting of each company depends on the unit price of its share. The construction equipment group Caterpillar thus weighs almost 12% of the index even though it only has the thirtieth largest capitalization in the world. Conversely, Nvidia only represents a little more than 2% even though it is the largest market valuation in the world.
Furthermore, Broadcom, Tesla, Meta or Micron are not part of it even though they belong to the fifteen largest capitalizations in the world.
