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19/10/2021

NASDAQ, price and investment on the NASDAQ index in 2021

Founded 50 years ago in New York, the NASDAQ index is one of the main American stock exchanges. The NASDAQ Stock Market is in second place in the United States, close behind the NYSE or New York Stock Exchange, which leads the ranking. 

A true window on the U.S. economy, this NASDAQ reflects the performance and financial health of the U.S. economy.

Before investing, it’s essential to know a few key points about the NASDAQ. This guide details its history, background and current context and the stocks that make it up alongside the NASDAQ 100 price. 

Overview of the NASDAQ

The term NASDAQ was originally an acronym for National Association of Securities Dealers Automated Quotations. Founded on February 8, 1971 in New York City, the NASDAQ was a U.S. stock market that focused on the technology and electronics sector, at that time an emerging field with a promising future. It should be noted that at the beginning, the market was a simple quotation centre. Electronic trading was not yet available.

The existence of NASDAQ has brought investors and investees closer together, narrowing the price gap. But this was not to the advantage of stock brokers, reducing its popularity in the stock brokerage community.  

The NASDAQ excludes financial companies and focuses on technology, telecommunications and Internet companies. It is open to non-US foreign companies. The American stock market includes the 100 largest non-financial companies, hence the name NASDAQ 100. However, the market is slowly opening up to other sectors of activity with strong development potential such as transport, industry, cinema and leisure, agri-food, bio-pharmaceuticals, and innovative and creative activities.

NASDAQ is particularly volatile, and is therefore conducive to short term trading, such as day trading.

Procedure for inclusion in the NASDAQ index

The NASDAQ stock index operates similarly to others, such as the Paris CAC 40 or the British Footsie. The NASDAQ includes nearly two billion shares and over three thousand stocks.

All companies managed by the NASDAQ market belong to the NASDAQ Global Market or the NASDAQ Global Select Market. In order to join the NASDAQ, each listed company must have eligible securities either by ADR or by shares.

There are other conditions to fulfill. To be permanently included in the NASDAQ index, the company must:

  • own at least two hundred thousand shares in volume every day
  • not be subject to legal proceedings
  • have already been subject to a public offer for a minimum period of three months
  • publish quarterly, semi-annual and annual reports.

The various NASDAQ categories

Contrary to what most people may think, the NASDAQ market is not one, but three different types of markets:

  • The NASDAQ National Market: Companies in this market category are among the largest companies listed on the New York Stock Exchange. To qualify, each company must have at least one million dollars in earnings and a significant market capitalization.
  • The NASDAQ SmallCap Market or NSCM: Companies with high potential, but small in size, make up this market, which lists around two thousand companies. For a company with a mid-market capitalization and a net profit of $750,000, access to the NSCM is possible.
  • The NASDAQ OTC Bulletin board: the OTC market is an over-the-counter market. The company does not need to belong to an index or to go through an exchange to make transactions and exchanges. Thanks to the electronic quotation system, the OTC market type is possible.

List of NASDAQ stocks in descending order of weight (company, activity, stock weight)

  •  Apple Inc-Informatics-11.36%. 
  • Amazon.com Inc-Informatics-9.55%. 
  • Microsoft Corp-Informatics-9.14% 
  • Facebook Inc-Informatics-5.28%
  • Alphabet Inc-Computer Science-4.92%. 
  • Alphabet Inc-Informatics-4.20%. 
  • Intel Corp-Informatics-3.03%. 
  • Cisco Systems Inc-Computer Science-2.72%. 
  • Comcast Corp-Telecommunications -2.09%
  • NVIDIA Corp-Semiconductors-1.86%. 
  • Netflix Inc-Internet-1.74%
  • Amgen Inc-Biotechnologies-1.68%. 
  • Adobe Systems Inc-Software-1.40%
  • Texas Instruments Inc-Semiconductors-1.36%
  • Booking Holdings Inc-Internet-1.32%. 
  • Gilead Sciences Inc-Health -1.29%
  • Broadcom Ltd-Semiconductors-1.28% 
  • PayPal Holdings Inc-Informatics-1.23%. 
  • QUALCOMM Inc-Semiconductors-1.10% 
  • Starbucks Corp-Restaurant-1.05%. 
  • Costco Wholesale Corp-Large Stores-1.03%. 
  • Charter Communications Inc-Cable and Satellite-1.02%. 
  • Kraft Heinz Co/The-Alimentation-1.00%. 
  • Baidu Inc. ADR-Internet-0.91% 
  •  Micron Technology Inc.-Semiconductors-0.89% 
  • Celgene Corp-Biotechnologies-0.85% 
  • Walgreens Boots Alliance Inc-Drug sales-0.84%. 
  • Mondelez International Inc-Foods-0.81% 
  • Applied Materials Inc-Semiconductors-0.79% 
  • Biogen Inc-Biotechnologies-0.75% 
  • T-Mobile US Inc-Telecommunications-0.69% 
  •  Activision Blizzard Inc-Computer Science-0.69%. 
  • Tesla Inc-Automobile-0.68%. 
  • Automatic Data Processing Inc-Internet-0.65% 
  • CSX Corp-Iron Mines-0.64% 
  • Marriott International Inc/MD-Hotels and cruises-0.64%. 
  • Cognizant Technology Solutions Corp-Informatics-0.63%. 
  • Intuitive Surgical Inc-Health -0.61% 
  • Intuit Inc-Internet-0.58% 
  • Vertex Pharmaceuticals Inc-Biotechnology-0.55%. 
  • eBay Inc-Internet-0.54%. 
  • Express Scripts Holding Co-Health -0.53% 
  •  JD.com Inc ADR-Online Sales-0.52% 
  • 21st Century Fox Inc-Edition-0.50%. 
  • Electronic Arts Inc-Computer Science-0.49%. 
  • Illumina Inc-Healthy-0.47% 
  • Regeneron Pharmaceuticals Inc-Biotechnology-0.46%. 
  • Lam Research Corp-Semiconductors-0.45% 
  • Analog Devices Inc-Semiconductors-0.44% 
  • Monster Beverage Corp-Non-Alcoholic Beverages-0.42% 
  • Western Digital Corp-Informatics-0.39% 
  • Fiserv Inc-Internet-0.39% 
  • Autodesk Inc-Software-0.38% 
  • Ross Stores Inc.-Clothing-0.38%. 
  • 21st Century Fox Inc-Publishing-0.37% 
  • Sirius XM Holdings Inc-Radio-0.36% 
  •  Alexion Pharmaceuticals Inc-Biotechnology-0.35%. 
  • American Airlines Group Inc.-Airline-0.33%. 
  • NetEase Inc ADR-Internet-0.31% 
  •  Paychex Inc-Internet-0.30% 
  • PACCAR Inc-Construction Machinery and Heavy Equipment-0.30% 
  • Microchip Technology Inc-Semiconductors-0.29% 
  • Ctrip.com International Ltd. ADR-Service Provider-0.29% 
  • Dollar Tree Inc-Food Store-0.29% 
  • Mylan NV-Pharmaceuticals-0.28%. 
  •  Align Technology Inc-Health -0.27% 
  • O'Reilly Automotive Inc-Specialty Store-0.27% 
  • Cerner Corp-Health-0.26% 
  • Skyworks Solutions Inc-Semiconductors-0.26% 
  • Xilinx Inc-Semiconductors-0.24% 
  • Wynn Resorts Ltd-Gambling and Casinos-0.24% 
  • Cintas Corp-Diversified Support Services-0.24 %
  • Incyte Corp-Biotechnologies-0.23% 
  • KLA-Tencor Corp-Semiconductors-0.23% 
  • Workday Inc-Internet-0.23% 
  • Liberty Global PLC-Telecommunications-0.23%. 
  •  IDEXX Laboratories Inc-Healthy-0.22% 
  • Seagate Technology PLC-Informatics-0.22%. 
  • Maxim Integrated Products Inc-Printed Circuit Boards-0.22% 
  • Verisk Analytics Inc-Research and Consulting-0.22%. 
  • Check Point Software Technologies Ltd-Computer Science-0.22%. 
  • Symantec Corp-Software-0.21% 
  • Fastenal Co-Construction -0.21% 
  • MercadoLibre Inc-Internet-0.21% 
  • ASML Holding NV-Semiconductors-0.20% 
  • Expedia Inc-Internet-0.20% 
  • BioMarin Pharmaceutical Inc-Biotechnology-0.19%. 
  • CA Inc-Informatics-0.19% 
  •  Vodafone Group PLC ADR-Telecommunications -0.17% 
  • JB Hunt Transport Services Inc-Trucking-0.17% 
  • Ulta Beauty Inc-Specialty Store-0.17% 
  • Synopsys Inc-Software-0.17% 
  • Citrix Systems Inc-Internet-0.16% 
  • DENTSPLY SIRONA Inc-Health -0.16% 
  • Take-Two Interactive Software Inc-Video Games-0.15%. 
  • Liberty Interactive Corp QVC Group-Internet-0.15% 
  • Cadence Design Systems Inc-Software-0.14% 
  • Hasbro Inc-Hobby Products-0.14% 
  • Hologic Inc-Health-0.13% 
  • Henry Schein Inc-Health-0.13% 
  • Shire PLC ADR-Pharmaceuticals-0.12% 
  • DISH Network Corp-Cable and satellite -0.12% 
  • Liberty Global PLC-Telecommunications-0.09%. 

Here is a summary of the capitalizations within the NASDAQ 100 according to industry:

  • Technology: 52.4%
  • Public service companies: 24.0%
  • Health: 14.9%
  • Consumer goods: 4.6%
  • Industry: 3.0%
  • Materials: 0.3%
  • Telecommunications: 0.8

The NASDAQ Composite: How does it work ?

The NASDAQ composite is the stock market index. It is one of the largest stock market indexes in the United States. In the technology sector, it is the largest stock market in the world. 

Is investing in the NASDAQ a good opportunity?

If you are an investor looking to invest in the computer, technology, telecommunications and internet sector, the NASDAQ could be a great business opportunity. But before you jump in, here's some information about the stock price and its evolution, the investment context and how it works.

NASDAQ Index History

From its inception to date, the index has experienced significant variation. The base index at the time of its launch was 250 points. Today, the index is over 8,000 points: a huge increase that is also a record. The index has experienced two slight downturns: the financial crisis of 2008 and the health crisis of 2020-2021.

Evolution of the index since its creation

  • February 08, 1971: NASDAQ was created with a base index of 250 points
  • 1996: integration of small and medium-sized companies with very strong growth
  • 1998: inclusion of non-US companies in the NASDAQ 100 list
  • 2000: the technology bubble
  • 2001: first stock market crash 
  • 2008: the beginning of the financial crisis, leading to a collapse in the world stock market
  •  2012: NASDAQ market capitalization reaches a record $4.526 trillion
  • 2014: opening for companies to issue several types of shares
  • 2015: Chinese stocks crash
  •  2019: - Nearly 3,200 stocks listed on the NASDAQ

- market capitalization of $7.984 trillion

- historical record of the index with 8000 points

  • 2020: The NASDAQ index price reached over 13,000 points.

The NASDAQ index value

The health crisis caused by the global coronavirus pandemic has affected the value of the NASDAQ index, with a downward trend in value over the last three years that has been stable since 2021. The index is determined by market capitalization weighting. During the second wave of the coronavirus, the NASDAQ recorded a decline of 2%.

Investing in NASDAQ

Despite fears in the financial world about the first and second waves of the health crisis, the NASDAQ is doing well. Thanks to the support from the US government with the aim of stimulating the country's economy, the NASDAQ was able to rebound despite the impact of the coronavirus outbreak.

Factors influencing the value

Like all other stock market indexes, the NASDAQ stock price can be influenced by various factors:

  • Trading volume: this parameter is an important factor in the evolution of the index price. If the volume of transactions increases, the price also increases, and vice versa.
  •  External factors: the index is affected by other parameters such as new product launches, management or strategic changes, publication of reports and results, etc.
  •  The US economy: the value of the index is strongly influenced by US economic parameters such as monetary policy, household consumption, the performance of economic players, interest rates, etc.
  • Geopolitical tensions, including bipartisan agreements, Middle East tensions, international relations with Asian countries.

How can you keep track of the NASDAQ ?

It’s important to follow NASDAQ price in real time. Many platforms offer real-time statistical data online. Trading platforms offer in-depth information on the price of a stock and a stock index.   Among the online sites that offer this service, there are:

  • Specialized sites such as Google Finances, Yahoo Finances, Boursorama, Bourse directe, Zone bourse
  • Trading platforms such as XTB, etoro, and avatrade

The different types of NASDAQ investments 

To generate profits, investing in the NASDAQ stock index is recommended by stock market analysts and experts. Investing via a broker is essential. Traders prefer these platforms because of the many types of investments that are offered:

  •  A diversified portfolio
  • Electronic trading
  • Leverage effects
  • CFDs or contracts for difference
  •  Shares and securities

To summarize

The American stock market index NASDAQ is a market with great potential for short and long term investments. It is accessible everywhere and is one of the most followed indexes in the world. The factors that make the reputation of the NASDAQ include high liquidity, high volatility and the choice between different types of investment. To invest on the NASDAQ, investors should stay abreast of NASDAQ stock market news, the American economy and the world economy.

Frequently asked questions

What exactly is the NASDAQ 100 ? 

The NASDAQ is an American stock market index that groups the 100 best companies, composed mainly of companies that operate in the field of technology. In addition to the American companies that make up the majority of the shares, several foreign companies are also included in the NASDAQ, provided they meet the admission requirements. These include minimum level of capitalization, profit generated, daily trading volume, etc.

What types of investors can invest in the NASDAQ ?

Investing in the US stock market is accessible through an online brokerage account. There are no categories of investors, as any person (natural or legal) can access transactions on an online stock brokerage site. There are many types of investments possible for online trading. The investment is possible either on the NASDAQ index or on the stocks that make it up. It all depends on the financial capacity of the investors.

What are the different factors that influence the NASDAQ 100 price and index ?

Both internal and external factors can influence the NASDAQ 100 stock price. Some of the most influential factors are:

  • The performance of the 100 companies that make up the index
  • Daily trading volume
  • The US economy
  • The global economy
  • American politics and international relations
  •  Special events: financial crisis, stock market crash, economic crisis, health crisis

What time does the NASDAQ open ?

The NASDAQ listing is open weekly from Monday to Friday, 24 hours a day. There is a 15-minute break between 10:15 p.m. and 10:30 p.m. There is also a one-hour break between 11:00 p.m. and 12:00 a.m. for maintenance purposes.

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