"Five Things You Always Wanted to Know About the NASDAQ 100 (But Were Afraid to Ask)"

Is the NASDAQ 100 the ultimate tech index? Is it the ultimate money-maker? Was it manipulated to drive demand for Elon Musk’s SpaceX stock? Ali Masarwah, fund analyst and managing director of the consulting firm envestor, debunks myths and misconceptions about the NASDAQ 100.

June 15, 2026. FRANKFURT (envestor).

1. Is the NASDAQ 100 a technology index?

No. Not at all, actually. Strictly speaking, this benchmark tracks the 100 largest companies by market capitalization listed on the NASDAQ stock exchange. The rules exclude banks but allow everything else. As a result, alongside tech giants like Apple, Alphabet, Meta, Nvidia, and others, the index also includes the coffee chain Starbucks and the wholesaler Costco. At the sector level, this selection index thus offers a certain degree of diversification. The fact that everyone believes the NASDAQ 100 is a pure tech index stems from an amusing, collective confusion of terms in the 1990s. When the NASDAQ stock exchange began operations in 1971, it became the world’s first exchange to do away with shouting white men on a physical trading floor. Trading took place electronically, i.e., via computer. During the dot-com boom, this led to a wonderful misunderstanding in common parlance: people simply equated the method of trading (a computer-based exchange) with the assets being traded (technology companies, including computer manufacturers). A myth was born.

2. And what does this myth actually mean in today’s reality?

Ironically, reality has caught up with and corrected that misconception from back then. Today, one could even describe the NASDAQ 100 as a “Big Tech” index. Officially, tech stocks like Apple or Nvidia account for just under 49 percent of the index’s weight. However, if you add in de facto tech empires like Alphabet, Meta (officially a communications service provider), Amazon, and Tesla (officially cyclical consumer stocks), along with other tech platforms, the total comes to over 70 percent of the entire index. The conceptual confusion of the past has thus become reality. Critics, however, complain that the NASDAQ 100 is neither fish nor fowl: it is too tech-heavy to be a true reflection of the U.S. economy, and on the other hand, too diluted to offer pure tech exposure.

3. Is it true that the NASDAQ 100 is a money-maker?

It certainly has been in recent years. ETFs that track the NASDAQ 100 have generated a fabulous return of around 20 percent per year in euro terms over the past 10 years (a cumulative gain of nearly 590 percent). Over the past 15 years, the total return has even exceeded 1,300 percent. But that wasn’t always the case: in 2002, the NASDAQ 100 was considered a money-destroyer par excellence. With the bursting of the dot-com bubble starting in March 2000, the index was literally shattered. The maximum loss reached 80 percent at its low in 2002. It would take 14 years—until 2014—for the NASDAQ 100 to recoup its losses—in nominal terms. The performance over the past 15 years must be described as extraordinary. The current AI hype, the listing of SpaceX in June 2026, and the prospect that OpenAI and Anthropic will also list on the NASDAQ in the coming months call for caution.

4. Why might the current euphoria surrounding SpaceX and AI be a warning sign?

Historically, stock prices tend to revert to their long-term average. Over the past 100 years, U.S. stocks have yielded a nominal return of just over 10 percent per year (assuming dividends are reinvested; the price-only return was 6.5 percent per year). A market phase with very high returns is an indication that future returns could be below average. Several banks therefore estimate the future performance of U.S. stocks over the next decade to be more in the range of 3 to 7 percent. Some observers see many signs of hype surrounding Big Tech and the NASDAQ 100: declining or even negative free cash flows, rising debt at many companies, the circular AI economy, and—last but not least—the fact that the NASDAQ is bending its own rules in the competition for new listings. To outmaneuver the New York Stock Exchange (NYSE) in the fierce battle for the new tech icons, the NASDAQ has relaxed its listing rules. The new “Fast Entry” rule allows mega-caps to be included directly in the benchmark index just five trading days after their IPO—tailored specifically for Elon Musk’s SpaceX, but potentially also for Anthropic and OpenAI. ETFs tracking the NASDAQ 100 will thus become “forced buyers” just a few weeks after SpaceX’s mega-IPO. Critics argue that it’s a red flag when index providers abandon their neutrality to fuel hype. So should ETF investors seek a fast exit from the NASDAQ 100? Not necessarily. Other experts point out that fast-track rules are nothing new in the stock market world. For example, in 1984, the index provider FTSE introduced a fast-entry rule for the FTSE 100 to allow the former state-owned company British Telecom to be quickly included in the index. The argument at the time was that such a large corporation needed to be swiftly included in a representative index.

5. Is there another way?

Yes. The index provider Standard & Poor’s has decided against a fast-track rule for the S&P 500. So AI companies will have to stay out of that index for about another year. Anyone who finds the NASDAQ 100 “too hot” might be tempted to switch from their NASDAQ 100 ETF to an S&P 500 ETF. However, since SpaceX is initially expected to have a maximum weighting of just two percent in the NASDAQ 100, and 85 percent of the companies in the NASDAQ 100 are also represented in the S&P 500, an AI crash would hit both ETF benchmarks hard. Investors should therefore focus more on the strategic weighting of U.S. stocks in their portfolios rather than just tinkering around the edges.