The Nasdaq index is one of the most widely followed stock market indices in the world, representing the performance of over 3,000 companies listed on the Nasdaq exchange. It is a composite index, which means that it is calculated based on the performance of multiple companies, and is weighted based on their market capitalization. Here’s a closer look at what comprises the Nasdaq index:
- Technology focus
The Nasdaq index has a strong focus on technology companies, including software, hardware, and internet-related businesses. This focus has earned it the nickname “tech-heavy index.”
- Inclusion criteria
Companies listed on the Nasdaq exchange must meet certain criteria to be included in the index, including minimum market capitalization and trading volume requirements.
- Weighted by market capitalization
The Nasdaq index is weighted based on the market capitalization of each company, which is calculated by multiplying the number of outstanding shares by the current market price per share.
- Top holdings
Some of the top holdings in the Nasdaq index include Apple, Microsoft, Amazon, Facebook, and Alphabet (Google). These companies represent a significant portion of the overall index and their performance can greatly impact the index’s value.
- Industry diversity
While the Nasdaq index is known for its technology focus, it also includes companies from a wide range of other industries, including healthcare, finance, and consumer goods.
- Global reach
The Nasdaq exchange is home to companies from all over the world, including the United States, China, and Europe, giving the index a truly global reach.
In summary, the Nasdaq index is a composite index that represents the performance of over 3,000 companies listed on the Nasdaq exchange, with a strong focus on technology and a weighting based on market capitalization. The index’s top holdings include some of the world’s largest technology companies, but it also includes companies from a diverse range of industries and geographies.