The table below lists the current & historical P/E (TTM) ratio & CAPE ratio of the NASDAQ 100 index. The current (July 1st, 2023) trailing price-to-earnings ratio of the index is 31.31. NASDAQ 100 tracks the performance of the 100 largest non-financial companies listed on the Nasdaq stock market. The index is heavily weighted towards technology and communucations companies. Apple Inc, Microsoft Corp, Amazon.com Inc, Nvidia Corp and Alphabet Inc (the parent company of Google) represent over 35% of the index. The NASDAQ 100 is used as a benchmark for investors and fund managers who want to track the performance of technology and growth-oriented companies. While itrepresents primarily U.S.-based companies, many of these companies have a global presence and are the most dominant players in their respective industries. As a result, the index’s performance can reflect not only the health of the U.S. technology sector but also global technology trends.
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NASDAQ 100 Index – P/E (TTM) & CAPE Ratio
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How the P/E ratio is calculated?
The price-to-earnings ratio for the index is calculated by dividing the total market capitalization of all index companies by the sum of trailing 12-month net income of the companies. Also companies with negative trailing earnings are included in the calculation. This means that the P/E calculated by us is higher than for example the P/E ratio that iShares (BlackRock) is publishing for their CNDX NASDAQ 100 ETF.
When comparing the P/E ratio of the index to other indices, it’s important to take account the difference in sector representation. One notable feature of the NASDAQ-100 is the exclusion of financial companies, such as banks and insurance companies. This differentiates it from other major indices which usually includes a broader range of sectors. Furthermore, the largest index constituents heavily dominate the entire NASDAQ 100 index, and the index’s performance and valuation are largely dependent on the ten largest stocks.