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• The Nasdaq 100 comprises the largest non-financial companies on the exchange.
• The addition of Airbnb (ABNB), Fortinet (FTNT), and Lucid (LCID) to the tech benchmark takes effect at the close on Dec. 17.
• Fox Corp, Trip.com, and CDW Corp are among those removed as part of the reconstitution.

The Nasdaq 100, a benchmark index that lists the largest non-financial companies on the Nasdaq exchange, will be adding six new stocks this coming week. The changes are part of a reconstitution of the index, an occurrence that takes place annually and takes note of a stock’s average daily volume. In this case, a company whose shares are listed under the tech benchmark should see a daily trading volume above 200,000.

Airbnb Inc., Lucid Group Inc., Fortinet Inc., Zscaler Inc. (ZS), Palo Alto Networks Inc. (PANW), and Datadog Inc. (DDOG) fit this bill and are therefore the Nasdaq 100’s new additions. Apart from increased liquidity coming with the move, the stocks are set for further investor interest given the potential to attract some of the world’s largest investors and index funds.

The changes will come into effect at market the close on Friday, Dec. 17. At the same time, the Nasdaq 100 will remove six other stocks from the index to accommodate the new ones. Those to make way are Fox Corp. (FOX), CDW Corp. (CDW), Check Point Software Technologies Ltd. (CHKP), Trip.com (TCOM), and Incyte Corp (INCY).

Market Reaction

Airbnb shares traded higher after hours, moving 0.32% to $180.99 after Friday’s -0.57% close. Lucid Group Inc ended the week over 3% up last week, with the electric vehicle maker’s stock price rising to $37.66. Shares of cybersecurity firm Fortinet traded higher on Friday, closing more than 5% up at $332.63 amid the potential for further gains.

Historically, stocks added to the Nasdaq 100 do not dazzle soon after the announcement. However, subsequent sessions have seen them outperform peers in the days leading to addition to the index.