Alphabet stock pops on Dow debut, but AI questions loom

Alphabet Shares rose 4% on Monday after the company officially joined. Dow Jones Industrial Averagereplacement Verizon and the addition of a symbolic blue chip designation.

The move comes despite continued pressure on the stock. Despite Monday’s gain, Alphabet is still on pace for its worst month since February last year; Six of the last seven weeks have been in the red. This marks a sharp turnaround from May, when the company was briefly in the shadows Nvidia becoming the world’s most valuable company in terms of market value after hours.

The alphabet’s inclusion in the Dow is symbolic rather than mechanical. The stock is already included in the S&P 500 and Nasdaq 100, which includes most benchmark assets, which limits the amount of mandatory fund buying tied to the index change.

Recent Dow entrants have also suffered after joining: Nvidia, sales force And Apple All traded lower 60 days after entering the index.

The weakness in Google shares comes as investors question the returns on the company’s AI spending, low-cost Chinese models develop, Google DeepMind researchers commit to Gemini and coding tools are left to competitors like Anthropic and OpenAI, and computing access emerges as both a customer constraint and a hiring issue.

Alphabet reportedly does not have enough computing capacity to meet demand from corporate customers. Metaand turning to infrastructure competitors: SpaceXto help close the gap. Alphabet did not respond to multiple requests for comment on reports regarding Meta’s use of Gemini.

Computing access has also become a recruiting tactic. Former Gemini co-chairman Noam Shazeer, who recently left Google for OpenAI, reportedly cited declining access to computing as part of his frustration.

At the same time, Chinese models are also dropping prices as Google tries to build an enterprise business around Gemini. DeepSeek said the fourth version of its open source model will arrive within two weeks.

This tension is now visible in 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 has raised more than $140 billion in debt and equity as the race for AI capital spending gets expensive.

WRISTWATCH: Alphabet shares continue to fall as AI talent leaves DeepMind to Anthropic