Nasdaq 100 (1985) tracks top 100 non-financial Nasdaq-listed firms.
Technology sector dominates (62.25% in 2025), driven by AI & digital transformation.
IPO leadership: Outperformed NYSE for six consecutive years (2024).
2024 rebalancing: Removed Super Micro, Illumina, and Moderna.
QQQ vs. S&P 500: Nasdaq 100 is tech-heavy and volatile, while S&P 500 is more diversified.
Opinion
Nasdaq 100 reflects technology-driven economic growth, maintaining its IPO leadership. However, its high tech exposure increases sector concentration risk, similar to past speculative bubbles. Unlike the dot-com era, today's firms are financially strong, making Nasdaq 100 a long-term growth leader but requiring risk management strategies.
Core Sell Point
The Nasdaq 100 is a benchmark for innovation, but high tech exposure increases volatility risks, requiring a balanced investment approach.
History & Evolution
The Nasdaq 100 Index, introduced in 1985, tracks the performance of the top 100 non-financial companies listed on the Nasdaq stock exchange. As the first electronic stock market in 1971, Nasdaq became a hub for technological innovation, and the Nasdaq 100 has since served as a benchmark for large-cap growth companies.
Technology Sector Dominance
As of 2025, the technology sector makes up 62.25% of the Nasdaq 100, led by Apple, Microsoft, and NVIDIA. Companies like Amazon and Tesla, though categorized in different sectors, operate technology-driven businesses, further solidifying Nasdaq’s tech-heavy nature. The ongoing AI and digital transformation boom continues to drive the index, making sector concentration risk and rebalancing impact key factors for investors.
Nasdaq’s Competitive Edge in IPOs
Nasdaq has outperformed NYSE in IPO listings for six consecutive years through 2024. Over 160 companies raised $22 billion on Nasdaq in 11 months of 2024, reflecting growing preference among tech-driven firms. AI-related firms' rapid expansion has further fueled Nasdaq’s dominance in public listings.
Inclusion & Exclusion Criteria
Companies must be exclusively listed on the Nasdaq Global Select Market, maintain high liquidity, and have a minimum 3-month trading history.
Financial firms & REITs are excluded.
Annual index rebalancing adjusts the composition, removing underperforming stocks.
In 2024, Super Micro Computer, Illumina, and Moderna were removed from the index.
Nasdaq 100 vs. S&P 500
QQQ ETF tracks Nasdaq 100, with a 62.25% tech weighting, making it more volatile.
S&P 500 covers 500 companies, offering a more diversified portfolio with lower volatility.
Market Performance & Growth Trends
Nasdaq 100 experienced major events such as the dot-com bubble (2000), the financial crisis (2008), and AI-driven expansion (2024).
After an 800% rise from 1995-2000, the dot-com crash led to a 76.81% decline.
The index only recovered its 2000 peak in 2015, but today’s AI-driven rally differs due to companies' strong profitability & financial stability.
Innovation & Economic Impact
Nasdaq defines innovation as a driver of economic value, knowledge integration, and real-world impact. R&D spending and patent filings serve as key indicators, expanding beyond technology to include healthcare, consumer goods, and other industries.
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