Alphabet joined the Dow Jones Industrial Average on Monday, replacing Verizon and adding a symbolic blue-chip designation, as shares rose 4%. The move comes despite continued pressure on the stock, which is tracking for its worst month since February of last year, with six of the past seven weeks in the red. The inclusion occurs amid investor questions about the payoff from the company's AI spending, with Google DeepMind researchers leaving for rivals like Anthropic and OpenAI, and compute access emerging as both a customer constraint and a recruiting issue.
Alphabet Stock Performance Shows Six-Week Decline Despite Monday Gain
Even with Monday's 4% gain, Alphabet is tracking for its worst month since February of last year, with six of the past seven weeks in the red. That marks a sharp reversal from May, when the company briefly eclipsed Nvidia after hours to become the world's most valuable company by market capitalization.
Dow Inclusion Carries Limited Mechanical Impact for Alphabet
Alphabet's Dow inclusion is more symbolic than mechanical. The stock is already in the S&P 500 and Nasdaq 100, where most benchmarked assets sit, limiting the amount of forced fund buying tied to the index change. Recent Dow additions have also struggled after joining: Nvidia, Salesforce and Apple all traded lower 60 days after entering the index.
Google DeepMind Researchers Depart for Anthropic and OpenAI
Google DeepMind researchers tied to Gemini and coding tools are leaving for rivals like Anthropic and OpenAI. Noam Shazeer, the former Gemini co-lead who recently left Google for OpenAI, reportedly cited reduced access to compute as part of his frustration. Compute access has become a recruiting tactic in the AI industry.
Alphabet Faces Compute Capacity Constraints for Enterprise Customers
Alphabet reportedly does not have enough compute capacity to meet demand from enterprise customers such as Meta, and is turning to infrastructure rivals, including SpaceX, to help close the gap. Alphabet did not respond to multiple requests for comment on reports about Meta's Gemini usage.
Chinese AI Models Apply Pricing Pressure as DeepSeek Announces New Release
Chinese models are pushing pricing lower just as Google tries to build an enterprise business around Gemini. DeepSeek has said the fourth version of its open-source model is coming in two weeks.
Alphabet Skips Buybacks and Raises $140 Billion in Debt and Equity
The strain is now showing up on Alphabet's balance sheet. Its cash pile is shrinking, it skipped buybacks in the first quarter for the first time in nearly a decade, and it has raised more than $140 billion in debt and equity as the AI capex race gets more expensive.
FAQ
What did Alphabet do on Monday?
Alphabet joined the Dow Jones Industrial Average on Monday, replacing Verizon, and its stock rose 4%.
Why are Google DeepMind researchers leaving the company?
Google DeepMind researchers tied to Gemini and coding tools are leaving for rivals like Anthropic and OpenAI. Noam Shazeer, the former Gemini co-lead, reportedly cited reduced access to compute as part of his frustration when he left for OpenAI.
How is Alphabet addressing compute capacity constraints?
Alphabet reportedly does not have enough compute capacity to meet demand from enterprise customers such as Meta, and is turning to infrastructure rivals, including SpaceX, to help close the gap.
