The Nasdaq 100 (NDX) is a stock market index composed of the 100 largest non-financial companies listed on the Nasdaq Stock Market, based on market capitalisation.
It serves as a benchmark for the performance of leading U.S. technology and growth-oriented companies. Whilst less broad in scope than the IXIC (Nasdaq Composite), the index is often seen as a barometer of the overall tech industry and broader economic growth.
Today’s Chart & Biggest Movers
The last couple of years have seen the Nasdaq 100 surge to new all-time highs, with generative artificial intelligence being one of the primary drivers for the rally.
Nasdaq Listed Daily Movers
Various Ways To Trade The Nasdaq 100
There are many ETFs that track the Nasdaq, with many also choosing to trade the index via Options and futures contracts. Talk of “the Q’s” is common when referring to the Nas100, with it simply being an ETF that allows more dynamic trading strategies on the index. These allow leverage for the amplification of trade sizing.
The Nasdaq 100 is heavily weighted towards the technology sector, encompassing companies from software and hardware to internet services and biotechnology. This concentration in high-growth industries makes the index particularly volatile, with performance often diverging significantly from the broader market.
Despite its sectoral focus, the index provides exposure to a diverse range of innovative and market-leading companies.
Nasdaq 100 Price Forecast
The Nasdaq 100 is a growth-oriented index heavily concentrated in technology, making it a high-risk, high-reward option for investors seeking exposure to innovative companies. Here are the bull and bear arguments for the index.
The Bull Argument: In a note to clients earlier this year, analysts at Bank of America said they were bullish on the US stock marketnot because they expect the Fed to cut but “because of what the Fed has accomplished. Companies have adapted to higher rates and inflation,” said the bank, adding that “we are past maximum macro uncertainty.” If, as expected, the Federal Reserve does begin to cut rates in September (currently anticipated), then it is expected to boost stocks. As a result, the Nasdaq 100 index is expected to benefit. While there has been a recent pullback in tech stocks, UBS analysts said in a recent note that it has created “a re-entry opportunity.”
The Bear Argument: On the other hand, recent earnings results (Q2) have resulted in some doubts beginning to creep in, which resulted in the aforementioned pullback in some tech names. An analyst at Morningstar Wealth recently told Reuters that “Markets today are pretty expensive to us at a broad level.” Focusing on Q2 earnings, the chief executive officer at Horizon Investment Services told Reuters that “the bar is pretty high for those tech stocks.” He added: “People really still need to be wowed. And if you’re not wowing, then you’re kind of vulnerable to a sell-off.”
Analyst Targets
Earlier this year, analysts forecast the NASDAQ-100 will end 2024 somewhere between 17,000 and 18,500. JPMorgan is said to be one of the more bearish names, expecting a decline of at least 10% by the end of 2024.
Trading Economics’ Nasdaq 100 Forecast: 19,315 by the end of the quarter and 18,246 in one year.
Nasdaq 100 Top 10 Companies
The Nasdaq 100 index is rebalanced once a year, typically in December.
| Company | Market Cap (As of July 30, 2024) |
|---|---|
| Apple | $3.346 Trillion |
| Microsoft | $3.171 Trillion |
| Nvidia | $2.744 Trillion |
| Amazon | $1.906 Trillion |
| Broadcom | $699.25 Billion |
| Meta Platforms | $1.181 Trillion |
| Tesla | $741.47 Billion |
| Alphabet | $2.095 Trillion |
| Costco | $361.56 Billion |
| Netflix | $269.06 Billion |
Top 5 Constituents
Who Should Buy the Nasdaq 100
The Nasdaq 100 offers exposure to some of the world’s most innovative and high-growth companies. However, it’s crucial to understand who might be the best fit for this index.
Growth Investors: Those seeking substantial capital appreciation over the long term will likely find the Nasdaq 100 appealing. Its focus on technology and growth-oriented companies has historically delivered strong returns.
Tech Enthusiasts: Investors who believe in the continued dominance of technology in the global economy and are keen on owning a basket of leading tech companies may find the Nasdaq 100 an ideal investment.
High-Risk Tolerance Investors: The Nasdaq 100 is known for its volatility. Investors comfortable with market fluctuations and seeking potentially higher returns may consider this index.
Long-Term Investors: Given the focus on growth and innovation, the Nasdaq 100 is typically considered a long-term investment, suitable for investors with a horizon of several years.
Indices – Daily Movers