Nasdaq is expected to announce changes to the Nasdaq-100 Index on Friday, which could be about more than just prestige for the companies that earn entry.
The reconstitution can be an important development for certain companies and their shareholders, because large funds that track the index will buy the newly added stocks. Those funds will also sell shares of companies that exit the index.
The Nasdaq-100 Index NDX is made up of the largest 100 nonfinancial companies in the full Nasdaq Composite Index COMP, which itself has 3,284 components. The index is reconstituted annually and rebalanced quarterly to weight the components by market capitalization, subject to limits described here .
When the index is reconstituted each December, it is weighted by the companies’ Nov. 30 combined market capitalization for all of their eligible common-share classes. In recent years, the announcement has come on the second Friday of December, with the changes taking hold later in the month.
The largest exchange-traded fund tracking the Nasdaq-100 is the $322 billion Invesco QQQ Trust QQQ. While Alphabet Inc. is one component of the Nasdaq-100, QQQ holds both the company’s Class A GOOGL and Class C GOOG shares, which together make up 5.1% of the ETF’s portfolio.
In case you are wondering, QQQ has returned 30% for 2024 through Wednesday, just ahead of a 29.2% return for the SPDR S&P 500 ETF Trust SPY. Total returns in this article include reinvested dividends.
To see which companies might be added to the Nasdaq-100 Index or removed from it for this year’s reconstitution, we looked at combined market capitalizations for all publicly traded common share classes for the entire Nasdaq Composite Index as of Nov. 30, as calculated by FactSet. Then we removed companies in financial-services industries and sorted the remaining list by market cap.
Among the largest 100 nonfinancial companies in the full Nasdaq Composite Index, these 11 aren’t currently in the Nasdaq-100 Index. They are sorted by Nov. 30 market cap:
|
Company |
Ticker |
Market cap. as of Nov. 30 ($mil) |
2024 total return through Dec. 11 |
|
Palantir Technologies Inc. |
PLTR |
$146,278 |
322% |
|
Sanofi ADR |
SNY |
$123,422 |
-1% |
|
Equinix Inc. |
EQIX |
$94,701 |
23% |
|
MicroStrategy Inc. Class A |
MSTR |
$79,445 |
551% |
|
Netease Inc. ADR |
NTES |
$55,657 |
7% |
|
JD.com Inc. ADR |
JD |
$53,572 |
36% |
|
Axon Enterprise Inc. |
AXON |
$49,334 |
149% |
|
Trip.com Group Ltd. ADR |
TCOM |
$44,063 |
102% |
|
Argenx SE ADR |
ARGX |
$37,389 |
59% |
|
Alnylam Pharmaceuticals Inc. |
ALNY |
$32,641 |
33% |
|
United Airlines Holdings Inc. |
UAL |
$31,845 |
140% |
Palantir Technologies PLTR tops the list with a market cap of $146 billion after its shares have more than quadrupled this year. The company is newly eligible for the Nasdaq-100 as it switched over to the Nasdaq from the New York Stock Exchange toward the end of November. At the time it announced the planned switch of its exchange, Palantir said it anticipated Nasdaq-100 inclusion , and shares popped.
The company ranks second on this list of software companies in the S&P 500 expected to show the largest sales increases in 2025 , with Axon Enterprise AXON, also listed above, taking the first spot.
Axon also leads this list of analysts’ favorite stocks among the S&P 500 .
More: Palantir’s fiery stock surge has been polarizing. Here’s what the CEO thinks.
Hot cryptocurrency play MicroStrategy Inc. MSTR also meets the market-cap threshold. It’s the fourth-largest non-financial company trading on the Nasdaq that’s not in the index. MicroStrategy’s stock has risen 551% so far this year, as bitcoin prices have surged and as the company, which is nominally a software vendor, has stepped up its holdings of the crypto asset.
See more: MicroStrategy shareholders continue to shoulder the cost of more bitcoin buys
And: MicroStrategy shares could surge even higher if added to Nasdaq 100 on Friday, crypto analyst says
So which companies might be removed from the index?
Among the current components of the Nasdaq-100, these 11 companies aren’t within the top 100 nonfinancial companies in the full Nasdaq Composite Index by Nov. 30 market capitalization, and are therefore candidates to be taken out of the index. This time the list is sorted by smallest to largest market cap:
|
Company |
Ticker |
Market cap. as of Nov. 30 ($mil) |
2024 total return through Dec. 11 |
|
Moderna Inc. |
MRNA |
$16,570 |
-57% |
|
Super Micro Computer Inc. |
SMCI |
$19,113 |
35% |
|
Illumina Inc. |
ILMN |
$22,862 |
9% |
|
Biogen Inc. |
BIIB |
$23,407 |
-39% |
|
CDW Corp. |
CDW |
$23,445 |
-21% |
|
MongoDB Inc. |
MDB |
$23,822 |
-27% |
|
GlobalFoundries Inc. |
GFS |
$24,026 |
-28% |
|
Warner Bros. Discovery Inc. Series A |
WBD |
$25,709 |
-5% |
|
ON Semiconductor Corp. |
ON |
$30,283 |
-19% |
|
DexCom Inc. |
DXCM |
$30,463 |
-35% |
|
Ansys Inc. |
ANSS |
$30,704 |
-5% |
Shares of Super Micro Computer SMCI are up significantly for 2024. However, the stock was actually down 68% from its March 13 closing high of $118.81 through Thursday’s close at $38.29. The company has said its accounting problems haven’t resulted from misconduct by management , but analysts still have their doubts:
Moderna Inc. MRNA, the smallest company on the above list, is a pandemic darling that’s seen a fall from grace for its stock as demand for COVID-19 vaccines has trailed off. Shares have more than halved over the course of 2024 to date.
Click on the tickers for more about each company.
Read: Tomi Kilgore’s guide to the wealth of information available for free on the MarketWatch quote page
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