Amazon Stock to Replace Walgreens in Dow Jones Industrial Average

Amazon’s entry into the Dow Jones Industrial Average was enabled by a 20-for-one stock split in 2022 that made its stock price sufficiently low for it to be included in the price-weighted index.

There has been speculation since the Amazon split that it would join the Dow industrials. The news came in a press release late Tuesday from S&P Dow Jones Indices, which oversees the Dow industrials.

Walgreens’ exit isn’t a surprise given the sharp drop in its stock price in recent years. That left it with little influence in the Dow industrials and the lowest market value by a wide margin—the company’s market capitalization is under $20 billion.

Amazon shares are up 1.4% in after-hours trading to $169.44 after losing 1.4% in regular trading. Walgreens shares are off 3.2% in after-hours trading to $21.60 after gaining 1.5% in regular trading Tuesday.

There isn’t a lot of index money tied to the Dow industrials, which has more popular recognition than interest from institutional investors.

This is the first change in the Dow industrials since August 2020 when
Salesforce,

Amgen,
and
Honeywell International
joined the index, replacing
Exxon Mobil,

Pfizer,
and
Raytheon Technologies,
now named RTX.

Walgreens joined the Dow Industrials in 2018 in what has been one of the worst stints of any stock in the index, which took its current format in 1896. Walgreens stock traded in the $60s when it was added to the index.

Barron’s has speculated that both Amazon and
Alphabet,
which split their stocks around the same time, could be the next to join the Dow industrials. 

Amazon is headed in. Alphabet and other contenders like
Berkshire Hathaway,

Meta Platforms,
and
Nvidia
are still waiting.

Write to Andrew Bary at [email protected]