Nasdaq 100 Rebalance: Apple, Microsoft, other heavyweight stocks fall ahead of index’s special rebalance
market capitalization at $2.967 trillion, while shares of Alphabet and Amazon dropped over 2%. Microsoft and Tesla share prices fell more than 1% each. In a move to address “overconcentration of index", Nasdaq said it would carry out a “Special Rebalance of the index by redistributing the weights".
The Nasdaq 100 includes 100 of the largest companies that trade on the Nasdaq exchange. The adjustment will be based on shares outstanding as of July 3, with changes announced on July 14. The changes will take effect before the market opens on July 24, Reuters reported.
Among constituents, Microsoft has the largest weight of 12.9% in the index, followed by Apple (12.47%), Alphabet (7.4%), Nvidia (7.0%), Amazon (6.9%) and Tesla (4.5%). These seven-largest companies account for 55% of the index and with the special rebalance, the combined weightage of these stocks is likely to be reduced. The changes to the Nasdaq 100 index will prompt investment funds that track it to adjust their portfolios.
The stocks with their weightage reduced in the index, will see selling from these investment funds. The Nasdaq 100 index has rallied more than 38% led by heavyweights. Shares of Nvidia have surged 189% and Tesla has more than doubled.
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