Nasdaq-100 (NDX) is one of the leading stock market indexes in the United States and a widely followed benchmark for large-cap growth companies.

Launched in 1985 by Nasdaq, the index tracks 100 of the largest non-financial companies listed on the Nasdaq Stock Market. Its constituents are heavily concentrated in sectors such as technology, consumer services, communications, biotechnology, and semiconductors.

Because many of the world's most innovative and influential companies are included in the index, the Nasdaq-100 is often viewed as a barometer of the U.S. technology sector and the broader innovation economy.

How the Nasdaq-100 Works

The Nasdaq-100 is a modified market capitalization-weighted index. Companies with larger market values generally have a greater impact on the index, although weighting limits are applied to reduce excessive concentration.

Some of the largest companies in the index include:

• Apple (AAPL).
• Microsoft (MSFT).
• Amazon (AMZN).
• Meta Platforms (META).
• Nvidia (NVDA).
• Alphabet (GOOGL).

Unlike broader indexes such as the S&P 500 (SPX), the Nasdaq-100 excludes financial companies and focuses on many of the largest growth-oriented businesses listed on Nasdaq.

The composition of the index is reviewed regularly to ensure it continues to reflect the largest eligible non-financial companies.

What the Nasdaq-100 Represents

The Nasdaq-100 is commonly used as a measure of the performance of large-cap growth stocks in the United States.

Because it includes many companies that are shaping trends in artificial intelligence, cloud computing, e-commerce, semiconductors, and digital communications, the index is often viewed as a benchmark for innovation-driven sectors.

Investors frequently use the Nasdaq-100 to track the performance of the digital economy and technology-focused businesses.

How to Invest in the Nasdaq-100

Although investors cannot purchase the index directly, they can gain exposure through investment products designed to track its performance.

One of the most popular options is the Invesco QQQ Trust (QQQ), one of the largest and most actively traded ETFs in the world.

Other ETFs and index funds also seek to replicate the performance of the Nasdaq-100, providing investors with diversified exposure to many of the largest companies listed on Nasdaq.

Futures contracts linked to the Nasdaq-100 are also actively traded on major derivatives exchanges, including CME Group.

Why the Nasdaq-100 Matters to Investors

The Nasdaq-100 serves as a key benchmark for growth-oriented investments and technology-focused portfolios.

The index is widely used by asset managers, institutional investors, and traders as:

• A benchmark for technology and innovation-focused funds.
• An indicator of investor sentiment toward growth stocks.
• A measure of the performance of the digital economy.
• The underlying benchmark for numerous ETFs, futures, and structured financial products.

Because many of its constituents operate in rapidly evolving industries, the Nasdaq-100 may experience greater volatility than broader market indexes. However, it has also historically benefited from periods of strong technological innovation and economic growth.