How the Nasdaq-100 Is Weighted, Rebalanced and Reconstituted

The Nasdaq-100 tracks 100 of the largest non-financial companies listed on the Nasdaq Stock Market. Unlike a simple market-cap index, it uses a modified market-capitalisation methodology designed to keep the benchmark representative while limiting excessive concentration.

Nasdaq says more than $1.7 trillion of investment exposure was linked to the index as of 30 June 2026, which makes its construction rules commercially important far beyond the companies inside it.

Modified weighting puts limits around concentration

Company size still matters, but the methodology can adjust weights when concentration thresholds are reached. That distinguishes the Nasdaq-100 from a pure market-cap portfolio in which weights simply follow relative market values.

The result is still heavily influenced by mega-cap technology and consumer companies, but the largest names do not have unlimited freedom to dominate the index.

Rebalancing and reconstitution are different

The Nasdaq-100 is rebalanced quarterly, which adjusts constituent weights. Reconstitution happens annually in December and determines which companies belong in the index.

That distinction matters for traders. A rebalance can create flows without changing membership, while a reconstitution can force index-linked funds to buy new entrants and sell companies that leave.

Financial companies are excluded

The index is often treated as a technology benchmark, but it is not formally a tech-only index. Consumer, healthcare and other non-financial sectors can have meaningful representation.

Banks and other financial companies are excluded, which is one reason the Nasdaq-100 behaves differently from the S&P 500 during periods when financial stocks lead the market.