S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show

Amazon Stock: Why it's Finally Included in the Dow Index

→ My biggest AI fear (From Paradigm Press) (Ad)
Amazon Stock price

Key Points

  • Amazon replaced Walgreens Boots Alliance in the Dow Jones Industrial Average.
  • Amazon stock is down 0.87% since joining the index.
  • In recent years, technology stocks like Intel, Microsoft, Salesforce, and Apple have gotten greater emphasis in the 30-stock, price-weighted index. 
  • 5 stocks we like better than Amazon.com

Does the recent addition of Amazon Inc. NASDAQ: AMZN to the Dow Jones Industrial Average signal that the 30-stock index is still relevant?

And what does the addition mean for Amazon stock?

There's been plenty of debate as to whether the price-weighted Dow is still a relevant market indicator.

It’s true that the S&P 500 reflects a broader swath of the economy and also tracks the smaller side of the large-cap universe, as well as more obscure stocks. 

Investors can invest in the entire basket of Dow stocks with the SPDR Dow Jones Industrial Average ETF Trust NYSEARCA: DIA.The Dow is trading lower in recent sessions, as top component UnitedHealth Group Inc. NYSE: UNH gapped down on reports that the insurance giant is the subject of a federal government antitrust investigation.

Replaced struggling Walgreens stock

Amazon stock is down 0.87% after joining the Dow on February 26. It replaced Walgreens Boots Alliance Inc. NASDAQ: WBA, whose stock price is down 15.47% in the past five years and 5.60% in the past 10 years, joined the Dow in 2018. 

Walgreens has been struggling, as have other pharmacy chains, with declining earnings. It had the Dow’s lowest price before being removed. 

In the past, being included in the DJIA was a signal to investors, analysts and the financial media that a company is a stalwart of the American economy.

However, that’s something that pretty much everybody with a pulse already knows about Amazon. In fact, you might even ask why it took so long for Amazon to get the nod. 

Walmart's stock split paved way for Amazon

A key factor for Amazon’s inclusion was Walmart Inc.’s NYSE: WMT announcement of a three-for-one stock split. That resulted in the retail industry having less representation in the index, a problem the addition of Amazon addressed. 


The Dow’s price-weighted methodology has an effect on which companies are included. In June 2022, Amazon stock split 20-for-1. Before that, with a price of $2,400 would have meant complete domination of the index. 

In comparison, UnitedHealth shares are trading at around $488, with the stock representing 8.63% of index weighting. 

Amazon’s price was $174.53 at the time it joined the Dow. It accounts for about 2.92% of index weighting.

After its split, Walmart stock now accounts for about 1% of index weighting. 

Dow selection not governed by strict rules

According to S&P Dow Jones Indices, “While stock selection for The Dow is not governed by a strict set of rules, the committee focuses on an eligible company’s reputation, its history of sustained growth, its interest to investors, and its sector representation of the broader market.”

There’s been increased emphasis on technology stocks in the past 25 years, with Intel Corp. NASDAQ: INTC, Microsoft Corp. NASDAQ: MSFT, Salesforce Inc. NYSE: CRM and Apple Inc. NASDAQ: AAPL all becoming Dow components.

Transportation and utilities stocks are tracked in their own Dow Jones averages, and are not part of the DJIA. 

But will joining the Dow actually mean much for Amazon stock? 

How important is Dow inclusion for Amazon?

Tom Hulick, CEO of Strategy Asset Managers, told MarketBeat that it may not make much of a difference. 

“All things being equal joining the Dow is positive for Amazon, but I wouldn't say that it's hugely important,” he said. He cited the relatively low index weighting as a factor. 

“Also, there's just not a massive amount of assets invested in Dow Jones Industrial Average ETFs/funds,” he said, adding that recent data showed $89 billion in assets indexed to the Dow at the end of 2022.

“So 3% of that is around $3 billion in inflows,” he said. “While $3 billion or so in inflows is definitely positive for the stock, I don't know that it will be very impactful on a stock with a market cap of $1.8 trillion.”

Amazon’s addition to the Dow is the first change since 2020, when Salesforce, Amgen Inc. NASDAQ: AMGN and Honeywell International Inc. NASDAQ: HON joined the club. 

→ My biggest AI fear (From Paradigm Press) (Ad)

Should you invest $1,000 in Amazon.com right now?

Before you consider Amazon.com, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Amazon.com wasn't on the list.

While Amazon.com currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The Best High-Yield Dividend Stocks for 2024 Cover

Looking to generate income with your stock portfolio? Use these ten stocks to generate a safe and reliable source of investment income.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Amazon.com (AMZN)
4.7135 of 5 stars
$186.13-1.5%0.11%64.18Buy$201.43
Amgen (AMGN)
4.9736 of 5 stars
$267.28-1.0%3.37%21.40Hold$295.30
Apple (AAPL)
4.8672 of 5 stars
$176.55+0.9%0.54%27.50Moderate Buy$204.08
Honeywell International (HON)
4.4042 of 5 stars
$196.16-0.4%2.20%23.16Hold$220.25
Intel (INTC)
4.7649 of 5 stars
$35.69-5.2%1.40%91.52Hold$42.48
Microsoft (MSFT)
4.6082 of 5 stars
$421.90-1.4%0.71%38.15Moderate Buy$430.52
SPDR Dow Jones Industrial Average ETF Trust (DIA)N/A$379.87-1.2%1.81%N/AN/AN/A
UnitedHealth Group (UNH)
4.9936 of 5 stars
$438.91-0.6%1.71%18.41Moderate Buy$576.48
Walgreens Boots Alliance (WBA)
4.5282 of 5 stars
$17.85-1.3%5.60%-2.55Reduce$24.36
Walmart (WMT)
4.3587 of 5 stars
$60.15+0.1%1.38%31.44Moderate Buy$61.60
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


Featured Articles and Offers

How to Become a "Make Money" Investor

How to Become a "Make Money" Investor

Whether you're a seasoned investor or just starting, this video offers valuable insights into making strategic choices that prioritize long-term growth and stability over short-term gains.

Search Headlines: