Alphabet joins Dow as shares rise 4% despite mounting AI costs
Google's parent company replaces Verizon in the blue-chip index, but competitive pressures in artificial intelligence temper the celebration
Alphabet shares rose about 4% Monday as the Google parent officially joined the Dow Jones Industrial Average, replacing Verizon Communications.
The inclusion gives Alphabet a symbolic blue chip designation, though its immediate market impact is limited. The company is already a major component of the S&P 500 and Nasdaq 100, which have far more assets tracking them than the Dow.
Monday’s rally follows a difficult stretch. Alphabet remains lower for June after six of the past seven weeks ended in the red, reversing part of the surge that brought it close to overtaking Nvidia as the world’s most valuable company in May.
Google has reportedly limited Meta’s access to Gemini models because it lacks enough computing capacity to meet demand. The shortage has also affected other enterprise customers, even as Google Cloud revenue rose 63% to more than $20 billion in the first quarter.
Alphabet has turned to outside providers to close the gap, including a reported agreement with SpaceX for access to Nvidia GPUs and related infrastructure.
Competition for AI talent has also intensified. Former Gemini leader Noam Shazeer left Google for OpenAI, while Nobel Prize winner John Jumper departed DeepMind for Anthropic.
Alphabet spent $35.7 billion on capital expenditures during the first quarter, more than double the amount from a year earlier. It also issued $31.1 billion in senior notes and paused share repurchases during the quarter.