The Dow Jones Industrial Average Changes Forever Today: Google Parent Alphabet Is In, Verizon Is Out, and a Longtime Component Is on Thin Ice

For more than 130 years, the Dow Jones Industrial Average (DJINDICES: ^DJI) has served as one of Wall Street's most trusted barometers. What was once a 12-stock index dominated by industrial companies in the late 1890s is now comprised of 30 multinational businesses from a variety of sectors.

Change is part of the Dow's storied history -- and today, June 29, features the 54th time since its inception that companies will be added or removed. Telecom titan Verizon Communications (NYSE: VZ) is being shown the door, Google parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) is being added, and the Dow's biggest laggard, Nike (NYSE: NKE), is officially on notice.

Image source: Getty Images.

Alphabet officially replaces Verizon in the Dow

Although Verizon is a staple in high-yield income portfolios, and it continues to deliver predictable wireless and broadband operating results, its 22-year run in the Dow came to an end for two reasons.

The first issue for Verizon is its comparatively low share price. Unlike most major stock indexes, the Dow Jones Industrial Average is share-price weighted. The higher a company's share price, the more influence it has within the index. Verizon's $45.68 share price (as of June 24) accounts for just 0.5% of the Dow's weighting.

The other death knell for Verizon is that it didn't perform. Since its addition in April 2004, Verizon's shares gained a paltry 36%, excluding dividends.

Alphabet's Class A shares (GOOGL) resolve both of Verizon's shortcomings. Alphabet's shares have rallied nearly 13,700% since debuting in August 2004, and its $345.29 share price will make it the sixth most influential company in the Dow.

Alphabet's addition also makes the Dow Jones Industrial Average more representative of the U.S. economy. Google is practically a monopoly in internet search, accounting for a shade over 90% of global search engine traffic in May 2026. When coupled with Alphabet's ownership of YouTube, the second-most-visited social site on the planet, you get a dominant ad-driven business.

But Alphabet is more than just ads. The company's cloud infrastructure services platform, Google Cloud, has seen sales reaccelerate after integrating generative AI and large language model solutions. The world's No. 3 cloud infrastructure services platform delivered 63% sales growth in the first quarter.

Alphabet is an artificial intelligence applications pioneer, making it an ideal addition to the iconic Dow.

Image source: Getty Images.

Nike has been put on notice

While S&P Dow Jones Indices, the committee responsible for adjusting the Dow Jones Industrial Average, only announced one addition (Alphabet, GOOGL) and one subtraction (Verizon), the message is clear: footwear and apparel giant Nike's 13-year tenure in the Dow may soon end.

No Dow component has less influence than Nike, whose share price fell below $42 on June 24. Additionally, Nike's five-year swoon has practically given back all of its gains since its September 2013 addition to the Dow.

At the heart of this decline is Nike's direct-to-consumer push, which ultimately hurt its relationship with wholesalers. The company's international sales (specifically in China) have also taken a beating as competition has intensified.

If Nike doesn't right the ship quickly, it'll likely be following Verizon out the door.

Sean Williams has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Nike. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.