Why the Dow Jones May Soon Lose Verizon—And Tony Dow's Market Analysis Points to Alphabet as the Likely Replacement

The Dow Jones Industrial Average stands as one of Wall Street’s most iconic indices, yet its composition remains far from static. Since its inception in 1896, this benchmark has undergone nearly 60 major changes, each reflecting shifts in the broader economy. Tony Dow and other market analysts have long scrutinized which companies belong in this exclusive 30-stock club—and increasingly, the evidence suggests Verizon’s tenure is nearing its end. The telecommunications giant, once viewed as a growth story when it entered the index in 2004, now faces mounting pressure from both valuation metrics and long-term growth prospects that no longer align with the index’s core requirements.

The Case Against Verizon: Why This Telecom Giant Faces Removal from the Dow

Three fundamental factors suggest that Verizon Communications is a prime candidate for removal from the Dow Jones in the near term, and analysts like Tony Dow have articulated these challenges clearly.

Share Price Vulnerability

Verizon’s nominal share price presents the most immediate concern. At approximately $39.24 per share (as of early 2026), the company sits well below the typical range for Dow components. Since the Dow is a price-weighted index—meaning higher nominal prices exert greater influence—Verizon’s valuation leaves it among the weakest contributors to the index. Only a handful of Dow components trade below $111 per share, and Verizon trails significantly behind even Nike, which closed near $65. This structural disadvantage means Verizon accounts for merely 241 of the Dow’s roughly 49,077 points, a negligible share of the index’s movement.

Stagnant Long-Term Returns

Perhaps more troubling is Verizon’s growth trajectory since joining the index in 2004. Over nearly 22 years, excluding dividends, the stock has delivered just 17% in total gains. This anemic performance in an era of explosive technology sector advances underscores the company’s inability to capture new growth opportunities. While Verizon’s 7% dividend yield remains attractive to income-focused investors, the lack of capital appreciation makes it an increasingly poor fit for an index designed to represent the economy’s most dynamic sectors.

Limited Growth Horizons

The third strike against Verizon is straightforward: the company faces inherent headwinds that constrain future growth. With the domestic wireless market already saturated and broadband penetration reaching maturity, Verizon’s long-term growth rate is unlikely to exceed low-to-mid single digits. The company remains an established communications stalwart—reliable and profitable—but it no longer embodies the forward-looking investment thesis that should characterize a Dow component in the 21st century.

Alphabet as the Ideal Successor: Tech, Communications, and Growth Potential

If S&P Dow Jones Indices removes Verizon, what company best fits the replacement criteria? Analysts evaluating this question, including perspectives aligned with Tony Dow’s market thinking, consistently point to one candidate: Alphabet, the parent company of Google.

Why Alphabet Stands Above Alternatives

Several other companies could theoretically replace Verizon. T-Mobile offers faster growth than its sector peer, yet its operational model closely mirrors Verizon’s, potentially setting it up for similar removal within a decade. Meta Platforms brings significant advertising industry exposure, but its $600-plus share price is arguably too extreme for practical index weighting purposes. Alphabet, by contrast, strikes the optimal balance.

Dual Growth Engines

Alphabet’s appeal rests on two converging business streams. First, the company’s advertising franchise—which accounted for 72.5% of net sales in the most recent quarter—commands a virtual monopoly in global search. YouTube ranks as the internet’s second-most visited social platform. This advertising-centric business serves as a valuable barometer for broader economic health.

Simultaneously, Alphabet operates as a cloud-computing and artificial intelligence pioneer. Google Cloud ranks third globally in infrastructure spending, with margins significantly exceeding the search division. Crucially, the cloud segment is integrating generative AI solutions that have accelerated its growth trajectory to beyond 30% annually. This combination—mature, profitable advertising revenue paired with high-margin, high-growth cloud and AI expansion—creates precisely the balance the Dow seeks.

Historical Performance Metrics

Alphabet’s stock performance since its August 2004 IPO demonstrates the kind of trajectory the index demands. Shares have compounded at more than 25% annually, a rate that has fundamentally reshaped portfolios and lifted indices. Beyond raw returns, Alphabet’s historical 20-for-1 forward stock split in July 2022 transformed its share price from approximately $2,200 to roughly $110, and subsequently to around $330. This split was instrumental—before it, Alphabet’s ultra-high nominal price made Dow inclusion impossible. Now, at $330 per share, Alphabet would rank as the ninth-most influential company in the index.

The Broader Context: Why Alphabet Fits the Modern Dow

Notably, among the five most valuable public companies globally, Alphabet remains the only one currently absent from the Dow. This omission appears increasingly anomalous, especially when considering that the index must evolve to remain representative of the contemporary economy.

Tony Dow’s perspective on such index shifts aligns with a fundamental principle: the Dow’s relevance depends on its ability to reflect genuine economic trends. A telecommunications company with single-digit growth prospects no longer meets this standard, whereas a technology-communications hybrid commanding both search monopolies and AI leadership clearly does.

The timing—with Verizon facing structural pressures and Alphabet poised to expand its influence—suggests that S&P Dow Jones Indices will eventually make the case for change. Whether this occurs before the close of 2026 remains to be seen, but the fundamentals increasingly point in one direction: Verizon’s decades-long tenure appears nearing its end, and Alphabet’s ascension into the Dow seems not merely possible, but probable.