Here’s What Advisors Need to Know About the Nasdaq 100 Changes

The Nasdaq 100 will be ushering in six new companies next Monday as six companies depart the top ranks, reported CNBC. Here’s a brief look at each of the newcomers and a list of the companies leaving.

Palo Alto Networks (PANW) is a cybersecurity company that offers both platform and cloud-based services and is the addition that investors are most excited about. The stock has risen more than 50% this year, outperforming the broader market and showing promise of continued growth.

“The network security side of the business, the cloud security side of the business, and the security operations side of the business, all those segments hadn’t had less than ten new major product releases over the last three fiscal years,” said Delano Saporu, founder of New Street Advisors.  “That tells me that the company is doing a great job of keeping up with infrastructure and IT demands.”

Airbnb (ABNB), the company that made vacation rentals in existing homes more than just a trend, is also being added to the Nasdaq 100. The company hosts an online marketplace where users can find lodging and other tourist-related activities globally and is within an industry that is expected to grow alongside pandemic recovery.

Fortinet (FTNT) is another cybersecurity company joining the ranks of the tech-heavy index; the company both creates and sells cybersecurity solutions, including antivirus software, physical firewalls, intrusion prevention systems, and more.

Lucid Group (LCID) is a U.S. electric vehicle manufacturer that offers luxury EV options for consumers with its flagship car, the Lucid Air. Lucid also works in energy storage with batteries and original equipment manufacturing.

Zscaler (ZS) is a security cloud company that offers the Zero Trust Exchange platform and boasts over 150 data centers and customers in 185 countries. It provides companies a way to run their businesses securely via its cloud platform that offers security protocols specific to the company without requiring costly infrastructure.

Datadog (DDOG) is a company that offers cloud monitoring of servers and databases and any related apps and programs through its data analytics platform. It enables IT teams to calculate performance metrics and monitor their infrastructure and cloud services all through one tool.

Companies departing the Nasdaq 100 include Cerner, Fox, CDW, Check Point Software,, and Incyte.

“Probably the industry pair that I think ultimately ends up helping the index’s performance is the addition of Palo Alto and the removal of Check Point Software. I think Palo Alto ends up doing better relative to the market, breaking to the upside,” said Ari Wald, head of technical analysis at Oppenheimer.

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