The Nasdaq 100 Index was founded by the Nasdaq Stock Exchange on January 31, 1985. It is one of the three major stock price indexes in the United States. It consists of 103 stocks issued by 100 companies listed on the Nasdaq Stock Exchange (the top 100 non-financial companies by market capitalization). Since most of these companies are technology companies, the index is also regarded as a barometer of the US technology industry.

At the end of December each year, the Nasdaq exchange will re-weight and re-rank the existing constituent stocks. The constituent stocks ranked after 125 in market value will be delisted and replaced by the non-constituent stocks with the largest market value. If the market value of a constituent company is less than 0.1% of the total market value of the Nasdaq 100 index for two consecutive months, the constituent stock will also be delisted.

The Nasdaq 100 Index is a market capitalization-weighted index. In order to prevent high market capitalization companies such as Apple Inc. from exerting too much influence on the index, the index has some rules to limit the influence. These rules are more complicated, so I won’t repeat them here.

In the beginning, the base value of the index was 250 points. At the end of 1993, the index rose to nearly 800 points. In order to distinguish it from the Nasdaq Composite Index of that period, the Nasdaq Stock Exchange adjusted its benchmark value to 125 points. As of April 3, 2020, the historical high of the index was 9,736.57 points touched on February 19, 2020.

Nasdaq 100 index historical trend

It is noteworthy that, in addition to technology companies, the Nasdaq 100 index also includes Starbucks (Starbucks Corporation), Kafu Heng’s (The Food companies like Kraft Heinz Company, and biopharmaceutical companies like Vertex Pharmaceuticals, Inc. and Biogen Idec, so investors need to look at this stock index in a comprehensive way.

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