Position News · GOOGL
Alphabet Joins the Dow Jones Industrial Average
Alphabet has been added to the Dow Jones Industrial Average, replacing Verizon Communications, which had held its spot in the index since 2004. The move makes Alphabet the fifth of the so-called "Magnificent Seven" to sit inside the Dow's 30 stocks, alongside Apple, Microsoft, Amazon, and Nvidia.
A more underreported detail from the same stretch of Alphabet coverage: Google reportedly told Meta Platforms back in March that it couldn't sell Meta as much of its Gemini AI capacity as Meta wanted to buy — not a pricing dispute or a legal fight, just Google running out of room. That's a striking data point about how tight AI compute supply still is even for one of the largest cloud providers in the world, and a reminder that "the AI infrastructure buildout" isn't an abstract theme — it shows up as literal capacity constraints between two of my own holdings. Separately, Morgan Stanley reiterated an Overweight rating on Alphabet in late June and raised its price target from $375 to $415.
What this means for the book
Index inclusion is a flow story more than a fundamentals story — being in the Dow doesn't change what Alphabet is worth, though it does mean any fund tracking the Dow now has to hold it. The more interesting thread for me is the Google-can't-supply-Meta-enough-Gemini detail: I hold both GOOGL (3.16%) and META (7.98%), and this is a small, concrete illustration of the AI-capacity-constraint theme that sits underneath a large share of this book, not just the semiconductor names. I'm not changing either position on this — it's context, not a catalyst — but it's the kind of detail that makes the thematic-clustering risk in the July letter feel less abstract.