Alphabet’s Massive Week: Joining the Dow and Running Out of Gemini AI Capacity for Meta

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In a single week, two things happened with Alphabet (GOOGL)…

One made headlines. The other almost didn’t.

The headline – Google’s parent company has been added to the Dow Jones Industrial Average. It replaces Verizon Communications (VZ), which had been in the index since 2004. Alphabet, the fifth member of the so-called “Magnificent Seven,” now joins Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Nvidia (NVDA) as inside the Dow’s 30 stocks.

The under-the-radar story – News emerged that Google told fellow tech titan Meta Platforms (META) in March that it couldn’t sell Meta as much of its Gemini AI as Meta wanted to buy. The reason wasn’t price or a legal fight… Google simply ran out of room. It didn’t have enough computing power to meet the demand.

Read those stories together, and they tell you something important about where Alphabet stands right now…

Alphabet Replaces Verizon in the Dow Jones

Most people know the Dow Jones Industrial Average as “the Dow” – the number that shows up on the news every night. It tracks 30 large U.S. companies. And it’s one of the oldest stock indexes in the world.

It’s also what investors call a “price-weighted index.” That means a company’s influence in the index is based on its share price, not its size. A stock trading at $300 per share has more sway over the Dow’s daily moves than a stock trading at $45 per share – even if the cheaper stock belongs to a bigger company.

That’s exactly why Verizon had to go.

VZ shares traded around $46 at the time of the announcement. That gave the stock just 0.5% of the Dow’s total weight – barely a rounding error. Alphabet’s shares trade near $350. That puts it among the six most influential stocks in the entire index.

S&P Dow Jones Indices – the group that manages the Dow – said the change broadens the Index’s exposure to AI, cloud computing, and digital advertising.

In plain terms, the Dow is trying to look more like the actual U.S. economy – which runs more on Google searches and cloud servers than on the kinds of industrial businesses that dominated the index 50 years ago.

Alphabet’s shares rose roughly 4% on the day it joined the index. The stock is up more than 11% so far in 2026.

Google’s Gemini AI Compute Limits and Meta

Now for the part that got less attention, and likely matters more…

Meta, the company behind Facebook and Instagram, had been using Google’s Gemini AI models for internal work. That included tasks like content moderation, which is flagging harmful posts and scams at scale. For jobs like this, Meta needs a ton of AI computing power. And the company turned to Google to buy it.

Google said no. Not because the company didn’t want Meta’s money… but because it didn’t have the capacity to fill the order.

Google told Meta around March that it couldn’t meet the full amount of Gemini access that Meta had asked to purchase.

The shortfall delayed some of Meta’s internal AI projects. Meta then told its own employees to use AI tools more carefully to stretch what they had.

Meta has since begun shifting some of that work to its own in-house AI model, called Muse Spark, to reduce its reliance on Google.

Meta wasn’t the only company Google affected by all this, either. Several other Google customers ran into the same wall, though on a smaller scale.

Why This Is Good News for Alphabet Investors

Here’s the key point…

Google isn’t losing business because its AI isn’t good enough. The company is turning away business because demand is greater than what it can supply.

Google Cloud, the part of Alphabet that sells AI tools and cloud computing, grew 63% in the first quarter of 2026. Revenue hit $20 billion for the quarter alone.

And the backlog, meaning contracts already signed but not yet filled, nearly doubled in a single quarter to $462 billion. Alphabet expects to recognize more than half of that as revenue over the next two years.

Alphabet CEO Sundar Pichai said it plainly on the first-quarter earnings call…

We are compute-constrained in the near term. Our cloud revenue would have been higher if we were able to meet the demand.

That’s a remarkable thing for a CEO to say. It means the only thing slowing Google Cloud’s growth right now is the speed at which Alphabet can build the infrastructure to serve its customers. The company plans to spend between $180 and $190 billion on infrastructure in 2026 alone.

Think of it this way…

A restaurant turning away customers because it is full is a very different problem than a restaurant with empty tables. Google’s problem is a full restaurant.

What It Means for Portfolios

Alphabet’s Dow addition brings something real with it…

Funds that track the Dow – including large exchange-traded funds (“ETFs”) like the State Street SPDR Dow Jones Industrial Average Fund (DIA) – must now buy and hold Alphabet. That creates automatic, ongoing demand for the stock that wasn’t part of the index before the June 29 inclusion.

The Gemini capacity story adds another layer…

It confirms that demand for Alphabet’s AI products isn’t hype.

Real companies – including one of the biggest in the world – want more of Google than the tech giant can currently provide. When Alphabet builds out enough capacity to close that gap, revenue that is sitting in the backlog will start flowing through.

We have two stories in one week with Alphabet – both pointing in the same direction.

Good investing,

John Evelius

Editor’s Note: Marc Chaikin, the founder of Chaikin Analytics, built an award-winning system that flagged Nvidia as a BUY before it soared as high as 45,000%. It also turned “bearish” on software stocks two months before they crashed this year. Now, Marc’s warning that a  “jump to lightspeed” has taken place behind the doors of a Silicon Valley AI lab – and says the repercussions are about to cleave the market in half this summer. This 60-year Wall Street legend has a FREE Hotlist of stocks to buy and an urgent Hitlist of stocks to sell now. Click for the full story, including stock names and tickers here…