Nasdaq 100 Adjusts Weightings Amid Record Gains by Major Tech Firms

GuruFocus.com
2024-12-27

Meta Platforms (META, Financials), Broadcom (AVGO, Financials), and Tesla (TSLA, Financials) all saw weightings within the Nasdaq 100 index shrink after notable stock price gains over the year. Bloomberg data shows that these changes aim to keep the index in balance.

  • Warning! GuruFocus has detected 5 Warning Sign with META.

Among those earning higher weight were Apple (AAPL, Financials), Nvidia (NVDA, Financials), Microsoft (MSFT, Financials), and Alphabet (GOOG, Financials; GOOGL, Financials). The rebalancing follows a rule limiting the total weight of the top five components to around 40%.

Projected at 515,000 units with year-over-year rise, Tesla is likely to set a new quarterly record for vehicle deliveries in the fourth quarter.

Third week of December saw 17,600 weekly insurance registrations for Tesla; its weekly insurance registrations in China showed a 12% rise over previous quarter and a 13% year-on-year increase. Although it declined consecutively from last week, Tesla's quarterly performance in the Chinese market is probably going to be outstanding.

A tire pressure monitoring system issue that might lead to an accident by not sufficiently notifying drivers of low tire pressures has caused Tesla to issue a recall for over 700,000 automobiles. Among the specific models from 2017 to 2025, the recall calls especially for the Model 3, Model Y, and the 2024 Cybertruck. Tesla will provide a free over-the-air software update to address the problem.

Although some recent dips, Tesla's stock has seen noteworthy rise and now ranks among the $1 trillion market capital value. Shares for this month are up 35%; for this year they are 87%.

Broadcom officially joined the $1 trillion club driven by a demand for its chips running artificial intelligence. Its AI-generated fiscal 2024 revenue doubled year-over-year to $12.2 billion, therefore fueling total sales of $51 billion more. Forecasts of a 40% rise in fiscal 2025 and rising market share inspire experts about Broadcom's potential AI income growth.

Claiming violation of its patents on "virtual machines," Netflix has sued Broadcom's subsidiary VMware. This legal action feeds ongoing disputes between Netflix and Broadcom that include claims of Netflix breaching Broadcom's video streaming technology patents since 2018.

Broadcom's stock has exploded over 100% as demand from artificial intelligence customers takes hold. AI revenue surged 280% to $3.1 billion only in the last quarter. Broadcom's acquisition of a significant quarter growth driver, a cloud computing software company, VMware has also drawn compliments from investors.

This article first appeared on GuruFocus.

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