What’s the NASDAQ?

Written By James Draper

The NASDAQ is one of the world's largest and most influential stock exchanges. Founded in 1971, it is famous for being the first electronic stock market. It uses computers to connect buyers and sellers, unlike traditional exchanges where trading happens on physical trading floors

The NASDAQ is home to many tech giants, like Apple, Microsoft, Amazon, and Tesla. It is often seen as an innovation and tech hub in the financial world, and is unique for many reasons. While most exchanges in the past started with face-to-face trading, the NASDAQ made trades electronic, which allowed trades to happen faster and more efficiently. Today, almost all global stock trading follows a model similar to NASDAQ. Additionally, the NASDAQ lists some of the most powerful companies in the world, such as Alphabet (Google’s parent company) and Netflix. For investors, this means NASDAQ is usually where you’ll find opportunities to invest in relevant industries like AI. Furthermore, the NASDAQ Composite Index tracks the performance of all stocks listed on the exchange. Over the last decade, this index has outperformed many others, showing the rapid growth of tech companies. Lastly, the NASDAQ makes investing more accessible. Investment platforms like Robinhood* and Fidelity* make it easier for individual investors to buy shares of NASDAQ-listed companies.

*Robinhood and Fidelity are apps where you can invest in stocks, ETFs, and more

Ultimately, understanding how the NASDAQ works is important for overall financial and future investment decisions!

The chart shows the Nasdaq Composite Index's performance from 1986 to 2024. It shows the index's growth over this period.

James Draper
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