The Dow Jones Industrial Average Will Change Forever on June 29, With Verizon Getting the Boot and a Virtual Monopoly Joining the Index

Verizon's 22-year run in the iconic Dow is ending, with a trillion-dollar company that's an artificial intelligence (AI) applications leader taking its place.

The Dow Jones Industrial Average will undergo its 53rd adjustment on June 29, with Verizon being replaced by a trillion-dollar company that specializes in artificial intelligence applications. This company, which has not been officially named, will join the index with a market capitalization of over $1 trillion. The decision to remove Verizon was made due to its relatively low market capitalization compared to other companies in the index. The adjustment will take effect on June 29, with the new company's stock price being added to the index.

The addition of the AI company to the Dow Jones Industrial Average will directly affect the portfolio of investors who track the index, as the company's stock price will now be included in the calculation of the index's value. This means that investors who have invested in index funds or exchange-traded funds that track the Dow will now have exposure to the AI company's stock. The AI company's stock price has been steadily increasing over the past year, with a gain of over 20%. This could potentially lead to an increase in the value of the index.

The Dow Jones Industrial Average has undergone numerous adjustments since its inception in 1896, with the most recent adjustment being the removal of ExxonMobil and Pfizer in 2020. The index has historically been composed of industrial companies, but in recent years has expanded to include companies from other sectors, such as technology and finance. The addition of the AI company to the index reflects the growing importance of technology in the US economy. Insiders know that the index is designed to be a representative sample of the US stock market, and adjustments are made to ensure that it remains relevant.

On June 29, the Dow Jones Industrial Average will officially add the AI company to the index, and investors will be able to track the company's stock price as part of the index. The decision to add the AI company was made by the index committee, which is composed of representatives from S&P Dow Jones Indices. A surprising detail is that the AI company's market capitalization is larger than the combined market capitalization of the 30 companies that made up the original Dow Jones Industrial Average in 1896.