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 the 100 largest companies listed on the Nasdaq exchange.
- 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. And while it certainly boasts a large concentration of tech companies, it also includes businesses in health care, retail and other industries.
The index can provide a glimpse into how some of the biggest nonfinancial companies in the U.S. 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 banks and other financial institutions. Because the companies are chosen based on market capitalization, the index includes some of the most influential and high-growth companies in the world.
While the Nasdaq 100 tracks companies in a number of industries, it’s widely known for its technology focus. The index includes some of the biggest tech companies – among them Apple, Microsoft and Amazon – so it’s often considered a benchmark for the performance of large, nonfinancial companies more broadly with a focus on the tech sector.
Just like with other stock indexes including the S&P 500, you can’t invest directly in the Nasdaq 100, but rather you can invest in funds that track the performance of the index or in individual stocks that are included in the Nasdaq 100.
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How are companies included in the Nasdaq 100?
To qualify for Nasdaq 100 inclusion, companies must already be listed on the Nasdaq exchange and cannot be classified as financial institutions. This means banks and other financial firms are excluded, while large companies from other industries are considered.
Technology companies account for more than half of the Nasdaq 100, so their performance has a significant influence on the index as a whole. The index also includes companies from areas like retail, automotive, health care, telecommunications and industrials.
What companies are in the Nasdaq 100?
As of September 2025, the 10 largest companies in the Nasdaq 100 are as follows:
- Nvidia
- Microsoft
- Apple
- Amazon
- Broadcom
- Meta Platforms
- Netflix
- Tesla
- Costco
- Alphabet (A shares)
How 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 the investment 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 of all 100 companies individually would be impractical, so most investors choosing this approach tend to select only a handful of companies included in the index that they are bullish on.
Exchange-traded funds (ETFs)
Buying shares in a Nasdaq 100 ETF index fund 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 are designed to track the performance of the index, meaning a single share of a Nasdaq 100 ETF gives exposure to all the companies within the Nasdaq 100 or is designed to mimic its performance.
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. What makes mutual funds different from ETFs is they’re priced only once per day after the market closes, and they are bought and sold once per day, too. (ETFs can be bought and sold throughout the trading day.)
Pros and cons of investing in a Nasdaq 100 index fund
As discussed above, investors can’t invest directly in the Nasdaq 100, but they can invest in index funds that track the performance of the index. Like any investment strategy, this type of investment has its 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 across industries: While technology dominates in the Nasdaq 100, the index also includes companies ranging from health care 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 do an audit of your overall investment portfolio to make sure that investing in a Nasdaq 100 index fund won’t leave you too exposed to the tech sector. It’s very much a balancing act.
- 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 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. Either way, here are the basic steps you may want to take:
- 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 due diligence if you’ll 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 the inevitable ups and downs of the market 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. This means it doesn’t capture a full picture of the U.S. economy. 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 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 do, you may be better prepared to invest in the Nasdaq 100 or pursue other investment strategies.
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Editorial staff, J.P. Morgan Wealth Management
