NASDAQ
Quick Definition
The National Association of Securities Dealers Automated Quotations — the second-largest stock exchange globally, known for its concentration of technology and growth companies.
Key Takeaways
- NASDAQ is the world's second-largest exchange, focused on technology and growth stocks.
- It was the first fully electronic stock exchange, founded in 1971.
- The NASDAQ-100 tracks the 100 largest non-financial listed companies.
What Is NASDAQ?
NASDAQ (National Association of Securities Dealers Automated Quotations) is the world's second-largest stock exchange by market capitalization, founded in 1971 as the first electronic stock market. Unlike the New York Stock Exchange (NYSE), NASDAQ operates as a fully electronic dealer market without a physical trading floor. It is home to many of the world's largest technology companies, including Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, and Nvidia. The NASDAQ Composite Index tracks all 3,000+ listed securities, while the NASDAQ-100 focuses on the 100 largest non-financial companies. NASDAQ has lower listing fees than NYSE, making it attractive to growth-oriented and technology companies. The exchange pioneered electronic trading and has been at the forefront of market structure innovation. Its heavy tech weighting means it tends to be more volatile than broader indices during technology-driven market cycles.
NASDAQ Example
- 1The NASDAQ Composite fell nearly 80% during the dot-com bust (2000-2002) but recovered to new highs by 2015.
- 2NASDAQ-100 gained over 50% in 2023, driven largely by AI-related mega-cap tech stocks.
Related Terms
NYSE (New York Stock Exchange)
The world's largest stock exchange by market capitalization, located on Wall Street in New York City, known for listing established blue-chip companies.
Market Index
A statistical measure tracking the performance of a group of stocks representing a market or sector.
Dow Jones Industrial Average (DJIA)
A price-weighted index of 30 large U.S. blue-chip stocks, one of the oldest and most-watched market benchmarks.
Market Capitalization
The total market value of a company's outstanding shares, calculated by multiplying the stock price by the number of shares outstanding.
Large-Cap
Companies with a market capitalization typically above $10 billion, considered stable blue-chip investments.
Stock
A security representing ownership in a corporation, entitling the holder to a share of profits and voting rights.
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