Nasdaq-100

The Nasdaq-100 (NDX) is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The stocks' weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It is limited to companies from a single exchange, and it does not have any financial companies. The financial companies are in a separate index, the Nasdaq Financial-100.

History

The Nasdaq-100 was launched on January 31, 1985, by the Nasdaq. It created two indices: the Nasdaq-100, which consists of industrial, technology, retail, telecommunication, biotechnology, health care, transportation, media and service companies, and the Nasdaq Financial-100, which consists of banking companies, insurance firms, brokerage firms, and mortgage loan companies.

The base price of the index was initially set at 250, but when it closed near 800 on December 31, 1993, the base was reset at 125 the following trading day, leaving the halved Nasdaq-100 price below that of the more commonly known Nasdaq Composite. The first annual adjustments were made in 1993 in advance of options on the index that would trade at the Chicago Board Options Exchange in 1994. Foreign companies were first admitted to the Nasdaq-100 in January 1998, but had higher standards to meet before they could be added. Those standards were relaxed in 2002, while standards for domestic firms were raised, ensuring that all companies met the same standards.

Investing in the Nasdaq-100

The Invesco QQQ, an exchange-traded fund (ETF) sponsored and overseen since March 21, 2007, by Invesco, trades under the ticker . It was formerly called Nasdaq-100 Trust Series 1. On December 1, 2004, it was moved from the American Stock Exchange, where it had the symbol QQQ, to the Nasdaq, and given the new ticker symbol QQQQ, sometimes called the "quad Qs" by traders. On March 23, 2011, Nasdaq changed its symbol back to QQQ. Retail buy and hold investors might prefer to purchase Invesco's similar Nasdaq: QQQM, or "QQQ Mini" which has a lower fee structure, but lacks the liquidity that high-frequency traders need in the traditional QQQ product.

QQQ is one of the most actively traded ETFs in the United States.

The Nasdaq-100 is often abbreviated as NDX, NDQ, NAS100, or US100, in the derivatives markets. Its corresponding futures contracts are traded on the Chicago Mercantile Exchange. The regular futures are denoted by the Reuters Instrument Code ND, and the smaller ''E-mini'' version uses the code NQ. Both are among the most heavily traded futures at the exchange.

Performance

Price history and milestones

The index set highs above the 4,700 level at the peak of the dot-com bubble in 2000, but fell 78% during the stock market downturn of 2002.

After a gradual 5-year recovery to an intraday high of 2,239.51 on October 31, 2007, the highest reached since February 16, 2002, the index corrected below the 2,000 level in early 2008 amid the late-2000s recession, the United States housing bubble and the 2008 financial crisis. Panic focusing on the failure of the investment banking industry culminated in a loss of more than 10% on September 29, 2008, subsequently plunging the index firmly into a bear market. The Nasdaq-100, with much of the broader market, experienced a limit down open on October 24 and reached a 6-year intraday low of 1,018 on November 20, 2008.

Amid quantitative easing (QE) from the Federal Reserve and optimism that the 2008 financial crisis was ending, the index embarked on a volatile four-year climb higher, closing above 3,000 on May 15, 2013, for the first time since November 15, 2000. By October 18, 2013, with GOOG passing $1,000 per share for the first time, the index had made a closing high of 3,353.88 and intraday high of 3,355.63, its highest levels since the 2000 United States elections and more than triple the 2008 low.

Record values

List of 1000-point milestones by number of trading days

Annual returns

The following table shows the annual development of the Nasdaq-100 since 1985.

Invesco QQQ Trust, Series 1 ETF Performance

The Invesco QQQ ETF has been averaging an annual return rate of 10.09% since its inception back in March 1999. A $1,000 invested in QQQ January 2015 was worth a total of $5,431.98 10 years later at January 18, 2025, assuming the dividends were reinvested with DRIP. That's an annual return rate of 18.44% with a total return of 443.20%.

Selection criteria

The Nasdaq has refined a series of stringent standards which companies must meet to be indexed. Those standards include:
* Being listed exclusively on Nasdaq in either the Global Select or Global Market tiers.
* Being publicly offered on an established American market for at least three months.
* Having average daily volume of 200,000 shares.
* Being current in regards to quarterly and annual reports.
* Not being in bankruptcy proceedings.

Additionally, since 2014, companies with multiple classes of stock are allowed to have multiple classes included in the index, provided they meet Nasdaq's criteria. Prior to 2014, companies were limited to one class of stock in the index (usually the one with the larger market capitalization).

Yearly rebalancing and re-ranking

While the composition of the Nasdaq-100 changes in the case of delisting (such as transferring to another exchange, mergers and acquisitions, or declaring bankruptcy, and in a few cases, being delisted by Nasdaq for failing to meet listing requirements), the index is reconstituted once a year, in December, when Nasdaq reviews its components, compares them with those not in the index, re-ranks all eligible companies and makes the appropriate adjustments.

As of June 2024, all companies are ranked by the size of their market values as of the last trading day of November.

Prior to June 2024, there were two tools the Nasdaq used to determine the market values of companies for the annual review:
* Share Prices as of the last trading day in October.
* Publicly announced share totals as of the last trading day of November.

To determine the new composition of the index: The top 75 components that meet Nasdaq's standards are automatically included in the index as of the end of the third Friday in December. Those components that are in the top 100 of all eligible companies at the annual review are retained in the index. Those ranked 101 to 125 are retained, provided that they were in the top 100 of the previous year's annual review. If they fail to move into the top 100 in the following year's review, they are dropped. Those not ranked in the top 125 are dropped regardless of the previous year's rank.

The index also drops a company if, at the end of two consecutive months, it fails to have an index weighting of at least one-tenth of a percent. This can occur at any time. Companies that are dropped are replaced by those with the largest market value that are not already in the index. Anticipation of these changes can lead to changes in the stock prices of affected companies.

The index publicly announces all changes, regardless of when they occur, via press releases at least five business days before the change takes place.

Differences from Nasdaq Composite index

The Nasdaq-100 is frequently confused with the Nasdaq Composite Index. The latter index (often referred to simply as the ''"Nasdaq"'') includes the stock of every company that is listed on Nasdaq (more than 3,000 altogether).

The Nasdaq-100 is a modified capitalization-weighted index. This particular methodology was created in 1998 in advance of the creation of the Nasdaq-100 Index Trust, which holds portions of all Nasdaq-100 firms. The new methodology allowed Nasdaq to reduce the influence of the largest companies and to allow for more diversification. However, the weights of the stocks were not changed after that, which led to more problems. In May 2011, Nasdaq did a major rebalance of the index to bring it closer to market-cap weighting.

The index is rebalanced quarterly only if:
* One company is worth 24% of the index
* Companies with a weighting of at least 4.5% make up 48% or more of the index

The index is rebalanced annually, after the quarterly rebalancing, only if:
* One company is worth 15% of the index
* The five largest companies by market capitalizations have weights of 40% or more of the index

Differences from other indices

In addition to its almost complete lack of financial companies, the Nasdaq-100 includes seven companies incorporated outside the United States. Although the S&P 500 Index includes non-U.S. companies, the Dow Jones Industrial Average has never included foreign companies.

As of May 2025, the index's eight companies incorporated in foreign countries are as follows:
* Canada - Shopify
* Cayman Islands (headquartered in Ireland, previously China) - PDD Holdings
* Ireland - Linde plc
* The Netherlands - ASML Holding, NXP Semiconductors
* United Kingdom - Arm Holdings, AstraZeneca, Coca-Cola Europacific Partners

Additionally, the Nasdaq-100 is also the only index of the three that has a regularly scheduled re-ranking of its index each year (in December), ensuring that the largest non-financial companies on Nasdaq are accurately included.

Related indices

In 2006, Nasdaq created a "farm team" index, the Nasdaq Q-50, representing the next fifty stocks in line to enter the Nasdaq-100. With some exceptions, most stocks that are added to the index come up through the Q-50. In 2011, Nasdaq created the NASDAQ-500 to track the 500 largest stocks on Nasdaq, and the Nasdaq-400, tracking those stocks not included in the Nasdaq-100.

Nasdaq has also divided the 100 into two distinct sub-indices; the Nasdaq-100 Tech follows those components who service the tech sector, and the Nasdaq-100 Ex-Tech, which follows those components that are not considered tech companies. The latter index includes noted e-commerce companies Amazon.com and eBay, which are classified as retailers.

Components

''This table is current as of the open of trading on May 19, 2025. An up-to-date list is available in the External links section.''

Historical components

As of December 2024, 518 companies have been components of the index. Of these, only four, Apple, Costco (through its merger in 1993 with Price Club, with Costco, as a separate entity, not becoming a component until at least 1989), Intel and PACCAR, have been components, continuously, since the first dissemination of the index in 1985. Two other current components, KLA Corporation and Micron Technology, were also components when the index started, but have been removed from the index over time for various reasons.

Regular changes

Changes in 2012

On April 23, 2012, Texas Instruments replaced First Solar, which did not meet the minimum monthly weight requirements. On May 30, 2012, Viacom became a component of the index, replacing Teva Pharmaceutical Industries, which transferred to the NYSE. On July 23, 2012, Kraft Foods, now known as Mondelez, became a component of the index, replacing Ctrip, which did not meet the minimum monthly weight requirements. Kraft Foods was the fourth component of the Nasdaq-100 to also be included in the Dow Jones Industrial Average, joining Cisco, Intel and Microsoft, but was removed from the DJIA when it subsequently split into two companies. On December 12, 2012, Facebook, Inc was added to the index, replacing Infosys, which transferred its listing to the NYSE. On December 24, 2012, 20 changes to the index took place. The ten companies joining the index were Analog Devices, Catamaran Corporation, Discovery Communications, Equinix, Liberty Global, Liberty Media, Regeneron Pharmaceuticals, SBA Communications, Verisk Analytics and Western Digital. The ten companies being dropped were Apollo Group, Electronic Arts, Flextronics, Green Mountain Coffee Roasters, Lam Research, Marvell Technology Group, Netflix, Research in Motion, VeriSign and Warner Chilcott.

Changes in 2011

On April 4, 2011, Alexion Pharmaceuticals replaced Genzyme prior to the market open. On May 27, 2011, Green Mountain Coffee Roasters replaced Millicom International Cellular after Millicom (MICC) withdrew its Nasdaq listing. On July 15, 2011, Sirius XM Radio replaced Cephalon in the index, and on December 6, 2011, Perrigo joined the index, replacing Joy Global, which transferred its listing to the NYSE. Perrigo had been a member of the index in the 1990s, being dropped in 1996. On December 19, 2011, five companies joined the Nasdaq-100 index due to the annual reranking of the index: Avago Technologies, Fossil Group, Monster Beverage, Nuance Communications and Randgold Resources, replacing FLIR Systems, Illumina, NII Holdings, Qiagen and Urban Outfitters.

Changes in 2010

On December 20, 2010, seven companies were added to the Nasdaq-100 index: F5 Networks, Akamai Technologies, Netflix, Micron Technology, Whole Foods Market, Ctrip and Dollar Tree, replacing Cintas, Dish Network, Foster Wheeler, Hologic, J. B. Hunt, Logitech and Patterson Companies. These were the only changes made to the index that year and the fewest since 1997.

Changes in 2009

On January 20, 2009, News Corporation was added to the index, replacing Focus Media Holding, which did not meet the minimum monthly weight requirements. On July 17, 2009, Cerner replaced Sun Microsystems after Sun Microsystems was acquired by Oracle. On October 29, 2009, Priceline.com replaced Juniper Networks after Juniper transferred its listing to the NYSE. On December 21, 2009, seven stocks joined the Nasdaq-100 index before the market open: Vodafone, Mattel, BMC Software, Mylan, Qiagen, SanDisk and Virgin Media. These stocks replaced Akamai Technologies, Hansen Natural, IAC/InterActiveCorp, Liberty Global, Pharmaceutical Product Development, Ryanair and Steel Dynamics.

Changes in 2008

DirecTV replaced BEA Systems on April 30, 2008 CA Technologies replaced Tellabs on May 19, 2008. FLIR Systems replaced UAL Corporation on July 21, 2008, and on November 10, 2008 Seagate Technology replaced Monster Worldwide. On December 22, 2008, Nasdaq added the following companies to the Nasdaq-100 index: Automatic Data Processing, First Solar, Life Technologies, Ross Stores, Maxim Integrated Products, Illumina, Pharmaceutical Product Development, O'Reilly Auto Parts, Urban Outfitters, J. B. Hunt and Warner Chilcott, replacing Amylin Pharmaceuticals, Cadence Design Systems, Discovery Communications, Lamar Advertising Company, Leap Wireless International, Level 3 Communications, PetSmart, SanDisk, Sirius XM Radio, Virgin Media and Whole Foods Market.

Changes in 2007

On February 1, Logitech replaced Comverse Technology. On February 14, Ryanair replaced American Power Conversion. On March 8, UAL Corporation replaced American Eagle Outfitters. On June 1, Cephalon replaced MedImmune. On July 12, Foster Wheeler replaced Biomet. On August 27, NTL Incorporated was merged into Virgin Media. On October 8, Leap Wireless International replaced CDW Corporation. On December 4, Baidu.com, Inc. replaced CheckFree Corporation. On December 24, Hologic, Focus Media, Hansen Natural, Steel Dynamics, and Stericycle replaced LM Ericsson, Patterson-UTI Energy, Ross Stores, Sepracor and XM Satellite Radio.

References

External links

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Components

Nasdaq Stock Market Indices

{{North and South American Stock market indices

1985 establishments in the United States
American stock market indices
Nasdaq