Nasdaq — Overview, History, Structure, Indexes, and Impact

What is Nasdaq?

Nasdaq is a global electronic stock exchange and market technology company. Launched in 1971 as the first automated stock market, it transformed trading by replacing the traditional specialist model with a computerized quotation and execution system. Today Nasdaq lists more than 5,000 companies and is closely associated with the technology sector.

Brief history and evolution

• Created by the National Association of Securities Dealers as an automated quotation system.
• Evolved from a NASD subsidiary into a national securities exchange and later expanded internationally through mergers.
• Reorganized into a public company (Nasdaq Inc.) providing exchange operations, market technology, and post-trade services.
• Became a prominent venue for technology and growth companies, and a visible benchmark for market sentiment.

How Nasdaq operates

• Three listing tiers: Nasdaq Global Select Market, Nasdaq Global Market, and Nasdaq Capital Market, each with specific listing standards.
• Operates multiple trading markets across equities, derivatives, fixed income, and commodities in the U.S. and internationally.
• Provides clearing, central securities depositories, market data, indices, and trading/settlement technology.
• Nasdaq’s technology and platforms are licensed and used by many exchanges worldwide.

Key indexes

• Nasdaq Composite: Broad index of more than 2,500 stocks listed on the Nasdaq exchange; highly tech-weighted and widely tracked as a gauge of growth and technology performance.
• Nasdaq-100: A large-cap growth index composed of the 100 largest non-financial companies listed on Nasdaq. It is widely traded via ETFs, futures, options, and mutual funds.

Major companies listed on Nasdaq include Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG/GOOGL), Meta Platforms (META), Amazon (AMZN), and Tesla (TSLA).

Market milestones and impact

• Nasdaq’s electronic model set a global standard for speed, transparency, and scalability in trading.
• It became the primary exchange for technology and growth companies, playing a central role in both the dot-com boom and its subsequent bust.
• Leadership milestones include appointing the first woman to lead a major U.S. exchange.
• The exchange has driven regulatory and corporate-governance changes, including rules aimed at improving board diversity and disclosure.

Business model and financial snapshot

Revenue is generated from several core businesses:
– Market services: access and transaction services across its markets.
– Investment intelligence: data, indices, and analytics for institutions and asset managers.
– Market technology: trading, clearing, settlement platforms, and anti-financial-crime solutions.
– Corporate services: listing fees and investor-relations tools.

Recent financial highlights (latest full-year reported results may vary by year):
– 2022 illustrative figures: total revenue ≈ $6.23 billion; net income ≈ $1.12 billion.
– The company returned capital to shareholders and has a history of dividend increases.

Nasdaq Inc. (NDAQ) itself is a listed company and is included among major market benchmarks.

Why Nasdaq matters

• It is one of the world’s leading exchanges for technology and growth companies, making its performance a bellwether for innovation-driven sectors.
• Its trading and market-technology platforms underpin operations at many other exchanges, extending its influence beyond listings.
• The Composite and Nasdaq-100 indexes are widely used by investors to measure and access market performance.

Bottom line

Nasdaq transformed markets through electronic trading and remains a central hub for technology and growth companies. Beyond its role as an exchange, Nasdaq is a diversified financial-technology company that provides market infrastructure, data, indices, and corporate services globally.