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NASDAQ’s Dominant Players Have Changed the Index’s Dynamics

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2.  Dominant names are different. In fact, only three of the top 10 stocks, based on market cap, remain the same.

Y2K: Apple, which had just introduced a basket of fruit-colored iMacs, was not even among the 10 largest Nasdaq stocks. And its market cap was around $22 billion.

Today: Apple is the most valuable company in history at more than $750 billion as iPads and iPhones are everywhere you turn.

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Market Realist – The NADAQ’s dominant players have changed drastically over the past 15 years. The top ten stocks today have only three stocks in common with the NASDAQ of 2000—Cisco (CSCO), Microsoft (MSFT), and Intel (INTC). The graph above shows the top five stocks of the NASDAQ by market cap in 2000.

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Market Realist – The graph above shows the top five stocks of the NASDAQ (QQQ)(XQQ) by market cap in 2015.

Apple (AAPL) makes up almost 10% of the NASDAQ, while Microsoft (MSFT) makes up 5% of the index. Amazon (AMZN) and Facebook (FB) weren’t part of the index in 2000, but they’re now among the top five largest stocks of the NASDAQ.

The top five stocks have been largely responsible for the NASDAQ re-attaining the 5,000 milestone. The dominant players are robust companies that have been yielding solid profits over the years. Their focus has shifted from dreams and promises to actual deliverables over the past 15 years. Today’s dominant players have changed the NASDAQ’s dynamics.

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Market Realist – Apple, in particular, deserves a special mention. The company became the first ever in history to record a market capitalization of $750 billion, making it the most valuable company in the world. The company made corporate history with its fiscal Q1 2015 earnings report. The tech (IVV) behemoth reported $74.6 billion in revenues and $18 billion in net profits, with earnings per share of $3.06—the largest corporate quarterly earnings of all time.

Apple had about 50% of overall US phone brands’ share of activations for Q4 2014. The iPhone remains one of the world’s best-selling gadgets, and it makes up almost 69% of the company’s revenues. The Apple Watch is already generating much interest and is likely to boost the company’s earnings.

Read on to the next part of this series to see how new entrants like Facebook have changed the face of the NASDAQ.

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