Overview

Nasdaq, formally known as Nasdaq Inc., is one of the major stock exchanges in the United States, located in the heart of New York City’s Wall Street. Established on February 8, 1971, Nasdaq started as an over-the-counter (OTC) market but quickly gained recognition as a formal exchange. It was created to provide an efficient platform for venture capital firms to raise capital, and from its inception, it utilized computerized trading systems.

Specific

Nasdaq is the world’s second-largest stock exchange by market capitalization, trailing only the New York Stock Exchange (NYSE). It is known for its emphasis on technology and innovation, with major tech companies like Microsoft, Intel, Google, and Apple dominating its listings. The fees for listing, maintaining a listing, additional listings, and stock dividends are generally lower than those of the NYSE.

Due to Nasdaq’s success, other countries have attempted to replicate its model to support their own venture firms. Japan has Jasdaq, South Korea has KOSDAQ, and Germany had Neuer Markt. However, none have matched Nasdaq’s success, and most either failed or were absorbed by larger exchanges. Notably, KOSDAQ in South Korea and the ChiNext in China are among the few successful Nasdaq-inspired markets.

Unlike KOSDAQ, which is seen as a secondary market to Korea’s KOSPI, Nasdaq operates independently from the NYSE. This allows companies to switch listings from the NYSE to Nasdaq, often due to lower maintenance costs. For example, Cisco Systems moved from the NYSE to Nasdaq in 1999 during the IT boom.

Nasdaq OMX currently handles Nasdaq stock trades. It was formed by merging Nasdaq with OMX, the Nordic stock exchange, under Dubai’s ownership. Recently, Nasdaq announced plans to fully transition its trading systems to cloud platforms like Amazon Web Services within the next decade.

Major Milestones

Nasdaq has introduced several innovative changes to the stock market. In 2021, it began moving its options market, MRX, to cloud-based systems. The success of major tech companies, known as the “Magnificent Seven,” has significantly narrowed the gap between Nasdaq and the NYSE. With these tech giants maintaining strong performance, Nasdaq has the potential to surpass the NYSE in market capitalization.

Opening Ceremony and Notable Listings

Unlike the NYSE’s traditional opening bell, Nasdaq celebrates its new listings with unique opening ceremonies. One of the most notable IPOs was Tesla, which went public on Nasdaq.

Top 7 Companies by Market Cap (June 2024)

1. Apple: $3.316 trillion
2. Microsoft: $3.263 trillion
3. Nvidia: $3.11 trillion
4. Alphabet (Google): $2.176 trillion
5. Amazon: $1.956 trillion
6. Meta (Facebook): $1.284 trillion
7. Broadcom: $687.3 billion