What Is NASDAQ? Price Chart & How To Buy

The Nasdaq index is one of the most important benchmarks of the global stock market, particularly for technology stocks. The Th-Option team has conducted in-depth research on what Nasdaq is, covering both the Nasdaq 100 and Nasdaq Composite, so you can understand the full picture and use it to inform your investment decisions.

What Is the Nasdaq Stock Market

Nasdaq stands for National Association of Securities Dealers Automated Quotations. It is the second-largest electronic stock exchange in the world, after the New York Stock Exchange (NYSE). It was founded in 1971 in the United States.
What sets the Nasdaq apart from other exchanges is that it has no physical trading floor. All orders are executed entirely through computer systems, which was a groundbreaking innovation at the time. Today, more than 3,000 companies are listed on the Nasdaq.
Most companies listed on the Nasdaq are world-leading technology firms such as Apple, Microsoft, Amazon, Alphabet (Google), and Meta (Facebook). It also includes a large number of companies in the AI, retail, clean energy, and semiconductor sectors.

How Many Types of Nasdaq Indices Are There

When people mention the “Nasdaq index,” many may be confused about which one is being referred to. There are actually two main indices that are widely used, each with a different purpose and calculation method.

Nasdaq Composite Index

The Nasdaq Composite is an index that includes every stock listed on the Nasdaq exchange — more than 3,000 companies. It is calculated using market-cap weighting, making it the broadest reflection of the overall market.
It is suitable for investors who want to see the general direction of the technology market and the Nasdaq as a whole. However, because it includes so many stocks, price movements are averaged out and it is less volatile than more focused indices.

What Is the Nasdaq 100 Index

The Nasdaq 100 is an index comprising the top 100 non-financial companies with the highest market capitalization on the Nasdaq. It therefore specifically represents the leading technology companies.
Stocks in the Nasdaq 100 include familiar names such as Apple (AAPL), Microsoft (MSFT), Tesla (TSLA), Alphabet (GOOGL), Amazon (AMZN), and Nvidia. Many investors use this index as a gauge of the health of the technology industry.

Trading Nasdaq Index CFDs Through Forex Brokers

Besides buying ETFs or mutual funds, another popular method among traders is trading CFDs (Contracts for Difference) on the Nasdaq 100 index through forex brokers. This method doesn’t involve holding actual stocks — instead, you open long or short positions based on the direction of the index price.
The advantage of CFDs is that they require a small initial investment, offer leverage, and allow trading in both rising and falling markets. However, leverage is a double-edged sword — if the trade goes against you, losses can exceed your initial investment.

An important consideration is that CFDs are not directly regulated by local securities commissions. Traders must choose brokers that hold licenses from reputable international regulators such as ASIC, FCA, or CySEC.
IC Markets and Pepperstone are ideal for traders who want low spreads and fast order execution. XM and Exness are suited for beginners with limited capital. IQ Option has a user-friendly interface but wider spreads.

Comparing Nasdaq Composite vs Nasdaq 100

The table below summarizes the key differences between these two indices, giving you a clearer picture of which type of investor each one is best suited for.

What’s in the Nasdaq 100: Key Stocks You Should Know

Understanding which stocks make up the Nasdaq 100 will help you see more clearly what factors drive the index and which companies have the most influence.

Many people wonder whether Walmart or Coca-Cola are on the Nasdaq. The answer is no — both are listed on the NYSE. Similarly, JPMorgan is a financial sector stock, which is excluded from the Nasdaq 100 by design.
The weighting of each company in the index is rebalanced every quarter. Stocks whose market cap declines may be removed and replaced by new companies. The list of top stocks is therefore always subject to change.

How to Invest in the Nasdaq Index for International Investors

For investors interested in the Nasdaq index, there are several accessible channels without needing to buy individual stocks directly.

Nasdaq Funds and ETFs Worth Considering

ETFs are a popular option for investing in the Nasdaq 100 without having to pick individual stocks. The most well-known fund is the Invesco QQQ Trust, which directly tracks the Nasdaq-100 index.
The Invesco Nasdaq 100 ETF has high liquidity and low fees, making it one of the most heavily traded ETFs in the world. If you compare the QQQ ETF chart with the Nasdaq-100 index, you’ll see they move almost identically.

• QQQ ETF (Invesco Nasdaq 100 ETF) directly tracks the Nasdaq 100
• Many local mutual funds offer feeder funds that invest in the Nasdaq 100 index
• You can buy international ETFs through brokers that support the US stock market
• Some local funds offer currency hedging policies

Key Considerations for International Investors

Local stock markets are many times smaller than the Nasdaq. Diversifying your portfolio into international markets helps reduce the risk of relying on a single market. However, you must also factor in currency exchange rate risks.
International investors can invest through locally managed Nasdaq funds or open an account with a licensed international broker. Be sure to compare fees, taxes, and withdrawal conditions before making a decision.
For those just starting out, investing through a mutual fund with a feeder fund structure may be the more convenient option, as it eliminates the need to manage foreign tax obligations on your own.

Nasdaq 100 vs the S&P 500 and Dow Jones Indices

A frequently asked question is how the Nasdaq 100 differs from the S&P 500. Both are major US stock market indices, but they have clearly different focuses.
In simple terms, the S&P 500 is an index that includes the 500 largest companies in the United States, listed on both the NYSE and Nasdaq, spanning every industry — from technology and finance to energy and consumer goods. The Nasdaq 100, on the other hand, focuses primarily on technology stocks.

The Dow Jones is another index people often compare. However, the Dow Jones includes only 30 companies and is calculated using price weighting rather than market cap. This calculation method means that stocks with a higher share price have more influence on the index, regardless of how large the company actually is.

How Is the Nasdaq Different from the Dow Jones

The Dow Jones Industrial Average, commonly known as the Dow Jones, is the oldest US stock index. It consists of only 30 large-cap companies from various industries. The key difference lies in the calculation method.
The Dow Jones uses price weighting, not market cap. This means stocks with a higher per-share price have more influence on the index, regardless of whether the company is large or small. In contrast, the Nasdaq 100 uses market-cap weighting, giving truly large companies like Apple and Microsoft a more significant role.
Investors seeking broad US market diversification typically look to the S&P 500. Those who want a specific focus on technology turn to the Nasdaq 100. The Dow Jones is best suited for tracking the general direction of traditional blue-chip giants.

Nasdaq Returns in Recent Years

Over the past 10 years, the Nasdaq 100 has delivered significantly higher average returns than other major indices. This is largely due to the explosive growth of stocks like Apple, Microsoft, and Nvidia, which have benefited from emerging technology trends.
In 2020, the market experienced a sharp downturn due to the COVID-19 crisis but recovered remarkably quickly. Technology stocks benefited from the shift to remote work and increased digital reliance. In 2025, the index continued to receive support from the AI trend, which drove up the valuations of companies like Nvidia and Microsoft.
However, always remember that past returns do not guarantee future results. Nasdaq stocks are highly volatile — during market corrections, the index can drop 20–30% within just a few months. It is best suited for disciplined investors who can tolerate risk.

Pros and Cons of Investing in the Nasdaq

Before making an investment decision, carefully consider both the advantages and limitations to ensure alignment with your investment goals.

Pros

1. Includes world-leading technology companies such as Apple, Google, and Nvidia
2. Nasdaq funds and the QQQ ETF are easily accessible, even with a small investment
3. High liquidity — tradeable throughout US market hours
4. Historical returns have outperformed the S&P 500 over multiple time periods
5. Multiple ETF options available, including Invesco QQQ and local funds

Cons

6. Heavily concentrated in technology stocks, lacking industry diversification
7. High volatility — can drop sharply during bear markets or on negative news
8. Does not include financial or heavy industrial stocks
9. International investors must bear currency exchange rate risk
10. Top stocks like Apple and Microsoft have disproportionately high weightings, making the index dependent on just a few companies

Key Takeaways About the Nasdaq Index

The Nasdaq is more than just a stock exchange — it is a window into the future of the global technology industry. Whether it’s AI, cloud computing, or clean energy, the Nasdaq 100 brings together the companies shaping the world economy in one place.
Investing through the Invesco Nasdaq 100 ETF or local Nasdaq funds is an easy and cost-effective approach, but you must understand the risks and plan for the long term. This index is not suitable for those who need stable returns or cannot tolerate volatility.
The Th-Option team hopes this article has helped you understand what Nasdaq is, what the Nasdaq 100 index is, and what noteworthy stocks it contains — serving as a starting point for your research before making real investments.

Frequently Asked Questions About Nasdaq (FAQ)

What’s the difference between the Nasdaq and the S&P 500

The Nasdaq 100 includes only 100 non-financial companies from the Nasdaq exchange, with technology stocks making up over 60% of its weighting. The S&P 500, on the other hand, includes 500 companies from both the NYSE and Nasdaq, covering every industry — from finance and energy to consumer goods. The Nasdaq 100 is therefore more volatile but has also delivered higher historical returns over multiple time periods.

How much does a Nasdaq 100 share cost

The Nasdaq 100 is not a single stock, so it doesn’t have a direct “per-share price.” However, if you want to invest tracking this index, you can buy the QQQ ETF, which is priced at approximately $450–$500 per unit (prices change daily). Alternatively, you can trade Nasdaq CFDs through forex brokers, which requires significantly less starting capital.

How many companies are on the Nasdaq

The Nasdaq stock exchange has more than 3,000 listed companies spanning a wide range of industries. However, the Nasdaq 100 index selects only the top 100 companies with the highest market capitalization that are not in the financial sector.

What does the Nasdaq 100 invest in

The Nasdaq 100 consists of leading companies listed on the Nasdaq exchange, with the majority in the technology, software, semiconductor, e-commerce, and digital media sectors. Examples include Apple, Microsoft, Nvidia, Amazon, Alphabet (Google), Meta (Facebook), Tesla, and Netflix. It also includes companies in healthcare, retail, and communications technology.

What is the Nasdaq 100 dividend yield

The overall dividend yield of the Nasdaq 100 is approximately 0.5–0.8% per year, which is considered very low compared to other indices. The main reason is that most technology companies reinvest their profits to expand their business rather than paying dividends to shareholders. Those seeking consistent dividend income may find the Nasdaq 100 is not the right fit.

What are the largest stock exchanges in the world

The world’s largest stock exchanges ranked by market capitalization are:

1. New York Stock Exchange (NYSE) in the United States — the world’s largest with a combined market cap exceeding $25 trillion
2. Nasdaq in the United States — the second largest, focused on technology companies
3. Shanghai Stock Exchange (SSE) in China
4. Euronext, spanning multiple European countries
5. Japan Exchange Group (JPX) in Japan, which includes the Tokyo Stock Exchange
6. Hong Kong Stock Exchange (HKEX)
7. London Stock Exchange (LSE) in the United Kingdom

Local stock markets are many times smaller than the NYSE and Nasdaq. Diversifying portfolios into international markets is an option many investors consider.

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