Alphabet joins the Dow Jones on June 29, but the market punishes the giant: a loss of $250 billion in a single day
This week marks a historic event for the stock market: starting June 29, Alphabet (GOOGL) will officially replace Verizon Communications in the Dow Jones Industrial Average. However, the joy of joining this prestigious benchmark was short-lived—the market reacted to the news differently than expected.
Composition Change: From Telecommunications to Technology
On June 23, S&P Dow Jones Indices announced its decision to replace Verizon, whose weight in the index was only 0.5%, with Alphabet. Alphabet's high stock price will give the company a much larger weight in this index, reflecting a fundamental shift in the structure of the U.S. economy—from traditional telecommunications to digital giants. With Verizon's departure, the Dow Jones finally loses its last representative from the telecommunications sector and becomes even more closely tied to the artificial intelligence economy.
Earlier, in 2024, Amazon had already joined the index, while Apple and Microsoft were already present. Now, Alphabet has joined this elite group. This is not just a formality—it is recognition of the company's scale and influence on global technology trends.
Talent Crisis: Two Resignations That Shook the Market
Despite the positive news about joining the Dow Jones, Alphabet's shares plummeted by 6% in a single trading session—its worst performance in nearly a year. The company's market capitalization shrank by almost $250 billion. The cause of the panic: two high-profile resignations of key figures in the field of artificial intelligence.
On June 18, Noam Shazeer, co-author of the famous 2017 paper "Attention Is All You Need" and one of the leaders of the Gemini project, announced his move to OpenAI. Less than two years ago, Google paid about $2.7 billion to bring Shazeer back from Character.AI. Then, on June 20, it was revealed that John Jumper, winner of the 2024 Nobel Prize in Chemistry for AlphaFold, is leaving Google DeepMind to join Anthropic after nearly nine years of work.
These two resignations are not just a loss of talent. They are a signal of a systemic crisis at Google that cannot be solved by simply being included in a prestigious index. The market saw that even huge salaries and resources cannot retain the best minds when competitors offer more ambitious projects.
My analysis: Alphabet's inclusion in the Dow Jones is undoubtedly a recognition of its scale and influence. But the talent crisis in AI deals a much more serious blow to the company's long-term prospects than any index can compensate for. Google approaches June 29 with an image and intellectual deficit that a spot in the rankings cannot fix.