How to invest in the Nasdaq 100: A guide
Editorial staff, J.P. Morgan Wealth Management
- The Nasdaq 100 is a stock market index that tracks 100 of the largest nonfinancial companies listed on the Nasdaq stock exchange, based on index eligibility and weighting rules.
- The index is well known for its inclusion of some of the world’s leading tech companies.
- You can’t invest directly in the Nasdaq 100, but you may gain investment exposure to the index by buying individual stocks, exchange-traded funds (ETFs) and mutual funds.
The Nasdaq 100 is one of the most closely watched stock indexes, especially if you’re interested in the technology sector. While it certainly boasts a large concentration of tech companies, it also includes businesses in healthcare, retail and other industries.
The index can provide a glimpse into how some of the biggest nonfinancial companies on the Nasdaq stock exchange are performing. This guide will explain what the Nasdaq 100 is, which companies it includes and what options may be available to investors who want to gain exposure to the index.
What is the Nasdaq 100?
The Nasdaq 100 is a stock market index that tracks 100 of the largest companies listed on the Nasdaq exchange, excluding financial companies. Constituents are selected using index eligibility criteria and are generally among the largest by market capitalization.
While the Nasdaq 100 tracks companies across a number of industries, it’s widely known for its technology focus. The index includes major tech companies such as Apple, Microsoft and Amazon, so it’s often viewed as a benchmark for large, nonfinancial growth-oriented stocks.
As with other stock indexes, including the S&P 500, you can’t invest directly in the Nasdaq 100. Instead, you can gain exposure through funds that track the index or by buying shares of individual member companies.
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How are companies included in the Nasdaq 100?
To qualify for Nasdaq 100 inclusion, companies must be listed on the Nasdaq exchange and meet index eligibility requirements, including that they are not classified as financial companies. This means banks and other financial firms are excluded, while large companies from other industries are considered.
Technology companies account for a substantial share of the Nasdaq 100’s weight, so their performance has a significant influence on the index as a whole. The index also includes companies from areas like retail, automotive, healthcare, telecommunications and industrials.
What companies are in the Nasdaq 100?
In September 2026, some of the largest Nasdaq 100 constituents by index weight included:
- Nvidia
- Apple
- Microsoft
- Micron Technology
- Advanced Micro Devices
- Amazon
- Meta Platforms
- Alphabet (Class A)
- Alphabet (Class C)
- Tesla
Constituents and weights change over time. You can review the current Nasdaq 100 constituent list and methodology on Nasdaq’s website.
Can you invest in the Nasdaq 100?
There are a few different ways to gain exposure to the Nasdaq 100, and the best choice for you may depend in part on how deeply involved you’d like to be in managing your investments and how diversified you want your overall portfolio to be. The options include:
Individual stocks
One option for gaining exposure to the Nasdaq 100 is purchasing shares of the companies that are included in the index. This approach allows you to handpick which businesses you want to invest in. Buying shares across the entire index individually can be time-consuming, so investors choosing this approach may instead select a smaller number of companies they feel strongest about.
Exchange-traded funds (ETFs)
Buying shares in a Nasdaq 100 ETF (sometimes referred to as a “Nasdaq ETF”) is one of the most common ways to gain exposure to the Nasdaq 100. An ETF pools money from investors to purchase a basket of securities that trades on an exchange throughout the day just like stocks. Nasdaq 100 ETFs aim to track the index’s performance, giving investors exposure through a single fund rather than requiring them to purchase the underlying stocks individually.
Mutual funds
Mutual funds that follow the Nasdaq 100 are yet another vehicle investors can use to gain exposure to the index. Like ETFs, these funds pool investor money to buy shares of the companies in the index in order to track its performance. Unlike ETFs, which can be traded throughout the day, mutual fund shares are bought and redeemed at the next calculated net asset value (NAV), generally determined after U.S. markets close.
Pros and cons of investing in a Nasdaq 100 index fund
Investors can’t invest directly in the Nasdaq 100, but they can invest in funds designed to track it. Like any investment approach, this has potential advantages and disadvantages. Understanding the potential pros and cons can help you determine whether investing in funds that track the performance of this index is the right option for you and your goals.
The potential pros of investing in a Nasdaq 100 index fund can include the following:
- Exposure to leading companies: This index tracks many of the world’s leading businesses, so investors in these funds can gain investment exposure to innovative and influential companies.
- Technology focus: Since the index is heavily weighted toward tech, it tracks the growth of one of the most dynamic sectors of the global economy. For those interested in investing in technology companies, a Nasdaq 100 index fund can be a particularly useful entry point.
- Diversification beyond technology: While technology dominates in the Nasdaq 100, the index also includes companies ranging from healthcare to retail to consumer services and industrials. This broader scope may help reduce the risk associated with investing in a single sector.
- Supports a long-term buy-and-hold strategy: Buying shares of an index fund, including one tracking the performance of the Nasdaq 100, may require less monitoring than investing in individual stocks, making it a potentially easier investment for those with a buy-and-hold investment strategy, depending on their individual circumstances.
Now that you understand some of the potential benefits of investing in a Nasdaq 100 index fund, let’s consider some of the potential drawbacks:
- Heavy tech concentration: The Nasdaq 100’s large concentration of tech stocks is both a strength and a weakness of the index. While the index does offer diversification beyond the technology sector, the Nasdaq 100 is heavily weighted toward tech. For this reason, it’s important to review your overall portfolio to make sure that investing in a Nasdaq 100 index fund won’t leave you too exposed to the tech sector.
- Market volatility: Growth-focused stocks – many of which are represented in the Nasdaq 100 – can experience bigger price swings than more conservative investments, so the Nasdaq 100 may be more volatile than broader market indexes.
- Potential for overexposure to very specific stocks: As stated above, the Nasdaq 100 includes some of the most well-known companies in the U.S. Because of that, there is the potential that some investors in Nasdaq 100 index funds become too exposed in their portfolio to a select list of companies – sometimes without even realizing it.
Investing in the Nasdaq 100: A step-by-step guide
Investing in the Nasdaq 100 can be done in several ways, depending on whether you want to buy individual stocks or buy shares of funds that track the index.
Here are general steps investors may consider:
- Open an investment account if you don’t have one: The first step is opening an account with a brokerage. Most major brokerages allow you to trade stocks, ETFs and mutual funds. When selecting a brokerage, it can be helpful to compare features such as fees, account types and research tools available to investors.
- Select your investments: Once you have an investment account, you’ll need to decide how you want to gain exposure to the Nasdaq 100. Some people prefer to buy shares of ETFs or mutual funds that directly track the index. Others may choose to invest in individual companies included in the index if they want to focus on specific businesses.
- Monitor your investments: After making your initial investment, you’ll want to monitor how it performs over time. Markets change, and companies within the index can shift in value. Regularly reviewing your portfolio can help ensure your investments are aligned with your long-term goals.
Things to think about when investing in the Nasdaq 100
While the Nasdaq 100 is one of the most widely followed indexes, there are a few important things to keep in mind before investing.
Be wary of overconcentration in technology stocks
The index is heavily weighted toward technology companies. This can be a strength during times of growth in the tech sector, but it can also be a vulnerability if technology stocks decline.
Do extra research if you may be overconcentrated in specific stocks
Because the index is weighted by company size, a small number of large companies carry significant influence. You might end up owning more of one company than you realize, especially if you buy its stock directly and also own a fund that includes the company as a large holding.
Risk tolerance
Understanding your comfort level with market ups and downs is important when deciding how much of your portfolio to allocate to a fund tracking the performance of the Nasdaq 100 – or any other index.
Overall diversification
The Nasdaq 100 excludes financial companies and underrepresents some other industries. That means it may not reflect the broader U.S. stock market. For a more balanced portfolio, it’s worth considering how the Nasdaq 100 fits alongside your other investments.
The bottom line
The Nasdaq 100 offers a snapshot of many innovation-driven companies that have a major impact on both the U.S. and the global economy. A Nasdaq 100 index fund can provide broad exposure to well-known businesses, but its heavy concentration in technology and a handful of large companies means this investment also comes with risks.
Learning about the Nasdaq 100 is just the first step – the next is figuring out how it may fit into your overall investing approach. Once you’ve considered that, you may be better prepared to invest in the Nasdaq 100 or pursue other investment strategies.
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