Verizon will lose its place in the Dow Jones Industrial Average , but if history is any guide this may not be bad news for the stock. On June 29, 2026, Google’s parent company , Alphabet, will replace Verizon, ending the latter’s 25-year run in the 130-year-old measure. The move means a greater exposure to artificial intelligence, cloud computing, and digital advertising. Yet, historical stock trends suggest that investors are sometimes better off buying the company leaving the Dow than the one entering it, a phenomenon commonly known as the ” Curse of the Dow ” or “Dow curse.” Out of the last seven Dow changes since 2015, five of the exiled stocks outperformed the shares they were replaced by in the measure 12 months out. Most outperformed by quite large margins as well. Although informal, what the curse really means is that after a new company is added to the list of blue-chip stocks that make up the Dow Industrial Average, the added company’s stock begins to significantly underperform compared to the months before inclusion. Verizon shares are up just 7.5% the last 12 months, while Alphabet shares have doubled. The Dow is up more than 20% over the same period. Companies added to the index often reflect stronger valuations and established growth, which could leave them more vulnerable to weaker returns after they finally get the nod to join the famed stock portfolio. Meanwhile, the removal of companies is due to the weak performance over the past years and a depressed valuation. The most recent shakeup of Nvidia replacing Intel in 2024 is a striking example. Intel’s exclusion was tied mostly to the company’s years of operational and financial struggle and Dow’s Nvidia inclusion at the time was to capture the boom around AI and a major shift in semiconductor industry. But data shows that since the change took effect, Intel has sharply outperformed its replacement. Data from FactSet outlines Intel’s strong stock performance which went on to do much better than its rival, Nvidia. So far, Intel has surged from $26.20 per share on November 8th to about $132 per share, a gain of roughly 400%. Nvidia has shown more moderate growth in comparison, climbing to about $200 a share from $147 per share over the same period. While removal from the Dow did not necessarily cause Intel’s rebound, still, the performance illustrates why index deletion does not always lead to further losses, especially for struggling stocks. What research says about this While there are no explicit working papers around the so-called Dow Curse, there are some relevant studies that capture the stock performances of deleted stocks and the ones replacing them. Overall, academic research has found that companies removed from major stock indexes can outperform the stocks replacing them over the following several years. This is potentially because investors initially overreact to the removal and deleted companies enter the period with depressed valuations. In a 2008 paper for The Journal of Wealth Management , researchers Anita Arora, Lauren Capp and Gary Smith tested 50 substitutions made since the Dow expanded to 30 stocks in 1928. They found that being removed from the Dow may not be as bad as their current predicaments indicate and companies replacing them may not be as terrific as their current records suggest. “If investors are insufficiently aware of this statistical phenomenon, stock prices may be too low for the former and too high for the latter—mistakes that will be corrected when these companies regress to the mean. Thus, stocks taken out of the Dow may outperform the stocks that replace them,” Arora et al. wrote in the paper. Later, a 2013 paper for the Journal of Banking & Finance by Khelifa Chan, Benton Gup and Ming-Shiun Pan examined long-term effects of S & P 500 index additions and deletions on a sample of stocks from 1962 to 2003 and found that deleted stocks outperformed added stocks over the long term. But despite these papers on the outperformance of deleted stocks, some examples don’t quite support the theory and have less favorable conclusions. A 1995 paper by Messod Beneish and John Gardner for the Journal of Financial and Quantitative Analysis concluded that the price of newly listed firms on Dow Jones remained unaffected and those removed from the index actually experienced significant price declines. The Dow is a price-weighted index and the companies with persistently lower-priced stocks have an immaterial impact on the index. So far, Verizon has represented just around one-half of a percentage point in the index due to its low share price, according to S & P Global. Now with Alphabet’s inclusion in the Dow, if the curse holds true, then Verizon’s exclusion might once again mean outperforming the company replacing it. —With reporting by Nick Wells
