There is the Nasdaq Composite Index and the Nasdaq 100 Index. Don’t be confused. The first consists of all Nasdaq domestic and international stocks listed on the Nasdaq Stock Exchange. Whereas, the Nasdaq 100 is an extract of the Nasdaq Composite, which has only 100 major non-financial companies. Additionally, the Nasdaq 100 is also known as the US 100. In the chart below, you can see the Nasdaq 100.
The main difference of the Nasdaq 100 with other indices such as SP 500 and Dow Jones is that it is mainly composed of stocks from the technology sector (47.25%). That’s why investors call it a benchmark for US technology stocks or simply the technology index. The rest belongs to consumer services (19.37%), health (10.13%) and consumer goods (7.82%).
Technological boom amid Covid-19
The coronavirus sent tech stocks soaring as demand for e-commerce, cloud technologies and streaming services soared during long lockdowns. Digitalization began long before the pandemic, but it accelerated that trend. As a result, Nasdaq soared to unimaginable highs. It has managed to rise almost 60% since January 2020.
How is the Nasdaq calculated?
The NASDAQ-100 Index is weighted by the market capitalizations of its companies, that is, the entire value of the index is equal to the aggregate value of the stock weights, also known as index shares, of each of the securities in the index multiplied by each of those values. last sale price of the securities and divided by the index divisor.
Because it is important? This weighting makes it possible to limit the influence of the largest companies and balance the index with all members. No Nasdaq-100 company can have a weighting greater than 24%. But still, when stocks of larger companies rise or fall, it has a greater influence on the index than stocks of smaller companies.
What companies are on Nasdaq?
In total, there are 102 symbols due to various companies with two classes of shares. For example, Google’s parent company, Alphabet, has Class A (GOOGL) and Class C (GOOG) shares in the index.
Here is the list of top stocks in the Nasdaq index, where you can find well-known companies from Apple to Tesla.
