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Understanding the NASDAQ-100: A Guide to the Tech-Heavy Index

Pepperstone
Market Analyst
11 Apr 2024
Unlike the S&P 500, the NASDAQ-100 focuses solely on the Nasdaq exchange and excludes financial institutions, making it a unique benchmark for tech-focused investment strategies.

NAS 100

The NAS 100 (also known as NDX, NDX100 or US100), often referred to as the Nasdaq 100, or simply the ‘Nasdaq’ for short, is a market capitalisation-weighted index comprising 101 stocks issued by the largest 100 non-financial companies traded on the Nasdaq stock exchange.

Launched in 1985, the base price of the index was initially 250, however this was halved in the early-1990s. Foreign firms were first admitted to the index in 1998.

In contrast to the US 500, the Nasdaq is limited solely to securities listed on one exchange, its namesake, while also excluding any companies in the financial services sector, which are listed in a separate index.

Stringent Selection Criteria

The NAS 100 uses stringent selection criteria. Beyond the exchange where a company's shares trade, factors like average daily trading volume and a minimum three-month listing requirement on an "established US market" come into play. Previously, stocks in the index were also limited to a single share class, though this requirement has since been relaxed. The NAS 100 is typically rebalanced on an annual basis, in December, when constituents are amended, and other appropriate adjustments are made.

In a similar manner to the US 500, the NAS 100 has displayed strong historical performance of late, albeit with higher volatility, befitting of its high-beta, tech-heavy nature. It's important to remember that past performance doesn't guarantee future results, and careful research is crucial before making any investment decisions.

Preview

The weightings of the top 50 index constituents can be found below, as of the time of writing:

PositionStockTickerWeighting as of 27/02/2024
1Microsoft CorpMSFT8.81%
2Apple Inc.AAPL8.20%
3Nvidia CorpNVDA5.62%
4Amazon.com IncAMZN5.22%
5Meta Platforms IncMETA4.94%
6Broadcom IncAVGO4.52%
7Tesla IncTSLA2.67%
8Alphabet IncGOOGL2.46%
9Costco Wholesale CorpCOST2.44%
10Alphabet IncGOOG2.40%
11Advanced Micro Devices IncAMD2.13%
12Netflix IncNFLX1.91%
13Adobe IncADBE1.88%
14PepsiCo IncPEP1.74%
15Cisco Systems IncCSCO1.48%
16T-Mobile US IncTMUS1.42%
17Intuit IncINTU1.38%
18Intel CorpINTC1.35%
19QUALCOMM IncQCOM1.29%
20Comcast CorpCMCSA1.26%
21Applied Materials IncAMAT1.23%
22Amgen IncAMGN1.16%
23Texas Instruments IncTXN1.11%
24Intuitive Surgical IncISRG1.02%
25Honeywell International IncHON0.99%
26Lam Research CorpLRCX0.91%
27Booking Holdings IncBKNG0.91%
28Vertex Pharmaceuticals IncVRTX0.83%
29Starbucks CorpSBUX0.81%
30Automatic Data Processing IncADP0.79%
31Regeneron Pharmaceuticals IncREGN0.78%
32Mondelez International IncMDLZ0.75%
33Micron Technology IncMU0.71%
34Analog Devices IncADI0.70%
35Gilead Sciences IncGILD0.68%
36KLA CorpKLAC0.68%
37Palo Alto Networks IncPANW0.66%
38Synopsys IncSNPS0.65%
39PDD Holdings Inc ADRPDD0.64%
40Cadence Design Systems IncCDNS0.62%
41MercadoLibre IncMELI0.62%
42ASML Holding NVASML0.61%
43CSX CorpCSX0.57%
44Marriott International Inc/MDMAR0.55%
45Crowdstrike Holdings IncCRWD0.53%
46Airbnb IncABNB0.50%
47Cintas CorpCTAS0.48%
48Workday IncWDAY0.48%
49PayPal Holdings IncPYPL0.48%
50O'Reilly Automotive IncORLY0.47%

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