The Nasdaq 100 (NDX) changes its holdings quarterly, with the next rebalancing announcement scheduled for December 12. To be added and remain in the index, companies must meet several criteria, including an average daily trading volume of at least 200,000 shares, up-to-date quarterly and annual filings, and a market capitalization ranking within the 125 largest Nasdaq non-financial firms.
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The market cap requirement could pose issues for Lululemon (LULU), The Trade Desk (TTD), DexCom (DXCM), and On Semiconductor (ON), according to Investors Business Daily (IBD). All four stocks are down by at least 15% year-to-date, while LULU and TTD are down by 50% and 66%, respectively.
Potential Additions to the Nasdaq 100
Meanwhile, companies that could be added to the index include Walmart (WMT), JD.com (JD), Trip.com (TCOM), and Western Digital (WDC). Last month, Walmart announced that it would move its stock to the Nasdaq after being listed on the New York Stock Exchange (NYSE) since 1972.
Nasdaq 100 inclusion carries many benefits, such as demand from index funds and a boost to a company’s visibility and credibility with investors. Inclusion can also improve liquidity, as trading volumes typically rise when a stock becomes part of a widely tracked benchmark.
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