Alphabet Inc Alphabet (GOOG) and Alphabet (GOOGL) shares are ticking higher in extended trading Tuesday after news broke that the Google parent will join the Dow Jones Industrial Average. It's replacing Verizon, and the change takes effect before the market opens on June 29.

Why the swap? S&P Dow Jones Indices said adding Alphabet will give the Dow more exposure to the dynamic parts of the U.S. economy — think advertising, cloud infrastructure, artificial intelligence, hardware, autonomous mobility, health care tech, and media distribution. That's a lot of sectors, but Alphabet touches all of them.

In a statement, S&P Dow Jones Indices explained: “Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA.”

There's also a mechanical reason. The Dow is price-weighted, meaning stocks with lower prices have less sway over the index's moves. Verizon's share price is modest, so it accounted for just half a percentage point of the Dow. Alphabet's stock, trading near $350, will carry more weight — and more influence.

As of Tuesday's after-hours session, Alphabet stock was up 1.10% at $349.89, according to market data.