# Nasdaq 100 Index: What It Is, How It's Weighted and Traded

![Nasdaq 100 Index: A stock index containing the 100 companies with the largest market cap listed on the Nasdaq stock exchange.](https://www.investopedia.com/thmb/UE2j6GUxcdysWhHG3zwHAdhqbgo=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/nasdaq100.asp-final-a3a531c7be49445aa9afcf99325900f8.png)

*— Investopedia / Zoe Hansen*

## What Is the Nasdaq 100 Index?

The Nasdaq 100 Index aggregates the largest 100 nonfinancial companies listed on the Nasdaq exchange, spanning a wide array of industries like technology, healthcare, and consumer staples. While it excludes financial sector companies, it offers a diverse representation of the market's most dynamically traded entities.

This index is built with a modified market capitalization approach, balancing the influence of its largest members. To remain relevant, Nasdaq periodically reviews the index composition, undertaking adjustments that ensure no single company or small group disproportionately affects performance. This makes the Nasdaq 100 a vital indicator for investors seeking broad exposure to top companies across multiple sectors.

### Key Takeaways

*   The Nasdaq 100 Index comprises the 100 largest nonfinancial companies trading on the Nasdaq exchange, excluding the financial sector.
*   Companies included in the index must meet specific criteria, such as being listed on the Nasdaq and having a minimum average daily trading value of $5 million.
*   The index is structured using a modified market capitalization method to balance the weights of all companies and prevent overconcentration.
*   Investors can gain exposure to the Nasdaq 100 through various financial products, including ETFs, mutual funds, and futures.
*   Special rebalancing occurs when the weight of certain stocks creates an overconcentration, with the most recent adjustment made in 2023 to address the rally of major tech stocks.  
    

## Exploring the Structure and Criteria of the Nasdaq 100

For inclusion in the Nasdaq 100 index, securities must be listed exclusively on a Nasdaq exchange. These can include common stocks, ordinary shares, [American depositary receipts](https://www.investopedia.com/terms/a/adr.asp), and tracking stocks. They must also be nonfinancial and have traded for at least three months on an exchange.

Each security in the Nasdaq 100 must have a minimum average daily trading value of $5 million over the past three months. There is no market capitalization requirement.

The Nasdaq 100 Index is constructed using a modified capitalization method. This method uses the individual weights of included items according to [their market capitalization](https://www.investopedia.com/terms/c/capitalizationweightedindex.asp). Weighting limits the influence of the largest companies and balances the index among all members.

Nasdaq reviews the composition of the index each quarter and adjusts the weights if the distribution requirements are not met.  

## Breakdown of Sectors in the Nasdaq 100

The Nasdaq 100 Index comprises assets in various sectors, except financial services. There are eight total sectors, which are the following as of Sept. 2, 2025:

*   Technology (62.48%)
*   [Consumer Discretionary](https://www.investopedia.com/terms/c/consumer-discretionary.asp) (18.62%)
*   Healthcare (4.57%)
*   Industrials (4.00%)
*   Telecommunications (4.08%)
*   [Consumer Staples](https://www.investopedia.com/terms/c/consumerstaples.asp) (2.58%)
*   Basic Materials (1.59%)
*   Utilities (1.36%)
*   Energy (0.50%)  
    

The top 10 companies by weight in the Nasdaq 100 as of June 30, 2025, are as follows:

*   Nvidia (9.17%)
*   Microsoft (8.79%)
*   Apple (7.29%)
*   Amazon (5.54%)
*   Broadcom (5.10%)
*   Meta (3.81%)
*   Netflix (3.33%)
*   Tesla (2.75%)
*   Costco Wholesale (2.57%)
*   Google (A Shares) (2.44%)  
    

### How Special Rebalancing Impacts the Nasdaq 100

Nasdaq undertook a special rebalancing of the Nasdaq 100 index on [July 24, 2023](https://www.investopedia.com/nasdaq-100-rebalancing-coming-on-july-24-7559084). The weights of the component companies were adjusted to reduce overconcentration and dependence on a few large companies. Nasdaq rules mandate a rebalance if stocks weighing over 4.5% each make up more than 48% of the index.

Nasdaq has only undertaken a special rebalance twice before, in 1998 and 2011. The latest special rebalance was triggered by a recent rally in tech stocks and Tesla shares, which pushed the aggregate weight of the top five companies (Microsoft, Apple, Nvidia, Amazon, and Tesla) above the 48% threshold. The special rebalance reduced their weights and increased those of other companies like Alphabet, Meta Platforms, Netflix, and Costco.

The special rebalance was expected to impact the performance and volatility of the index and the individual stocks, as some investors were likely to adjust their portfolios to align with the new weights. However, an increase in volatility never materialized, but a short decline did. It's difficult to say whether this was due to the rebalance or if the index was simply following the rest of the market, which is more likely because prices began trading upward in October 2023 market-wide.

## Investment Opportunities in the Nasdaq 100

The Nasdaq 100 index is a list of the largest 100 companies by modified market cap trading on the Nasdaq exchanges. There are many ways to gain exposure to the index without buying each individual stock.

[Exchange-traded funds](https://www.investopedia.com/terms/e/etf.asp) (ETFs), mutual funds, futures and options, or annuities all exist that mirror the performance of the Nasdaq 100. For the average investor, ETFs are generally the simplest and least risky means of gaining exposure to the companies in the index.

## What Companies Make the Nasdaq 100?

The Nasdaq 100 consists of the 100 largest companies, by modified market cap, trading on Nasdaq exchanges in sectors like consumer goods, healthcare, technology, and utilities.

## What Does Nasdaq 100 Stand for?

Nasdaq 100 is an abbreviated form of the Nasdaq 100 Index, the 100 largest nonfinancial companies by modified market cap trading on a Nasdaq exchange.

## Is Nasdaq 100 a Buy or Sell?

Whether to buy or sell depends on your market outlook, goals, and risk tolerance. Consult a financial advisor to see if the Nasdaq 100 fits your financial situation.

## The Bottom Line

The Nasdaq 100 Index focuses on the largest 100 nonfinancial companies trading on Nasdaq exchanges. It is a diversified index providing a broad overview of the market, covering a variety of sectors. Investors seeking broad exposure to some of the world's largest companies can invest in the index via ETFs, mutual funds, futures and options, or annuities.

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