An investor’s guide to buying NASDAQ stocks

Want to learn how to invest in the NASDAQ and its top tech stocks from Australia? You’re not alone. Many Australian investors look to the NASDAQ to invest in the world’s largest companies overseas. Investing in the NASDAQ can get you exposure to world-leading technology and growth companies, from cloud and AI to consumer platforms and biotech. 

Here’s what you need to know to get started, including how to buy NASDAQ listed stocks in Australia with CMC Invest.  But before that, let’s clarify the basics. What exactly do we mean when we talk about NASDAQ stocks? 

What is the NASDAQ? 

The NASDAQ is a US stock exchange that was founded in 1971. It pioneered fully electronic trading and today operates a highly liquid marketplace for buying and selling securities of all kinds. The Nasdaq exchange hosts over 3,000 companies, including many of the world's most innovative and well-known names such as Apple, Microsoft, Amazon, NVIDIA, and Meta, as well as a growing group of emerging businesses in high-growth sectors like software and semiconductors. 

So yes, NASDAQ stocks are simply those listed on the NASDAQ exchange, but there is important nuance in how these stocks are grouped and referenced in the market. 

The NASDAQ 100 is widely used as a benchmark for growth and is often compared to other major market indices. It tracks the 100 largest non-financial companies listed on the NASDAQ exchange. While it is commonly seen as a technology-focused index, because of the heavy weighting of tech firms, it is not limited to that sector. The NASDAQ 100 also includes companies from a range of industries such as industrials, retail, telecommunications, biotechnology, health care, transportation, media, and services. 

In contrast, the NASDAQ Composite is a broader index. It includes nearly every stock listed on the NASDAQ exchange, with thousands of companies across all sectors. As a result, it is far more diversified than the NASDAQ 100. 

This distinction is important. References to “NASDAQ stocks” in financial media can mean different things depending on the context. Sometimes they refer to the NASDAQ Composite Index. Other times, they point to the NASDAQ 100, or even just a small group of dominant tech names within it. 

Why invest in NASDAQ stocks? 

Exposure to leaders in innovation 

Investing in the NASDAQ, whether through the NASDAQ-100 or the broader NASDAQ Composite, gives you exposure to global companies beyond Australian shores. These companies are often the ones shaping major long-term trends in technology, such as artificial intelligence, cloud computing, cybersecurity, digital media, e-commerce and biotechnology. 

Strong historical growth 

Over multiple market cycles, the exchange has hosted some of the fastest-growing firms on the planet. Past performance isn’t a reliable indicator of future results, but the NASDAQ’s composition has historically skewed towards businesses reinvesting for growth. 

Diversification beyond Australia 

Adding US shares or NASDAQ-centric ETFs can diversify your sector exposure away from Australia’s resource- and financials-heavy market, introducing you to different earnings drivers and currency effects. 

Future-focused sectors 

Whether it’s generative AI, advanced chips or new therapeutics, many early commercial winners in these sectors are often first listed on the NASDAQ before growing in size to join the NASDAQ-100. 

How can you invest in the NASDAQ? 

Invest in NASDAQ-listed shares directly 

One way to access international shares is by buying individual US companies listed on the NASDAQ, which provides targeted exposure but also involves concentrated risk in single companies. 

Invest in NASDAQ-100 ETFs 

Exchange-traded funds that track the NASDAQ-100 can offer diversified exposure in a single trade. ETFs vary by structure, fees, and whether they are AUD-hedged or unhedged, so it’s important to review each fund’s objectives and risks before investing. 

Some popular NASDAQ-100 ETF options available to Australian investors include: 

• BetaShares NASDAQ-100 ETF (NDQ) — Tracks the NASDAQ-100 index via ASX listing. This is a popular option for Australian investors seeking local access to U.S. technology and growth companies. 

• Invesco QQQ Trust (QQQ:US) — One of the most widely recognised US-listed ETFs tracking the NASDAQ-100. It is frequently used by both institutional and retail investors. 

How to start investing in NASDAQ stocks from Australia: Step-by-step guide 

If you’re just starting your journey of learning how to invest in NASDAQ from Australia, these are the steps to follow: 

1. Open an account with CMC Invest: Create your account and start investing. With CMC Invest, you can explore Australian and international markets from one platform. 

2. Enable access to international shares: NASDAQ securities trade in US dollars. With CMC Invest, you can tap into US markets alongside the ASX from the same account. Forex conversions apply and are shown before you place an order. 

3. Research NASDAQ opportunities: Learn about and decide on your risk appetite and choose if you want broad index exposure (e.g. a NASDAQ-100 ETF) or to invest in specific companies. Look into their recent results, sector drivers (AI, consumer demand, market volatility, competition) and valuation. 

4. Choose your approach: Decide whether to make a lump-sum purchase or build a position over time. Also factor in diversification — ask yourself how will your NASDAQ holdings sit alongside your other investments?  

5. Place your investment: Search for your preferred NASDAQ security (e.g. a US share or ETF), select a market or limit order type, enter the quantity you want, review the costs and forex, then submit. Here’s a quick walkthrough on researching and placing an order. 

6. Monitor and review: Some investors choose to review their portfolio regularly, considering performance, dividends/distributions, and risk profile. 

Risks and considerations when buying NASDAQ stocks 

Market volatility 

High-growth sectors can be more volatile than the wider market. Prices can move on earnings surprises, product cycles, interest-rate changes and general sentiment towards technology and biotech. 

Concentration risk 

The NASDAQ 100 is heavily weighted towards a handful of mega-cap stocks, which are companies with market capitalisations typically above $200 billion. This high concentration can amplify market movements in either direction, depending on the outlook for just a few dominant names. To manage this concentration risk, some investors diversify across different exchanges and geographies outside the US. 

Exchange-rate risk (AUD/USD) 

US-listed securities trade in USD. This can impact your underlying investment returns when converted back to AUD. Think about whether you prefer AUD-hedged or unhedged exposure when using ETFs. 

Your investment goals and time horizon 

Define whether you’re looking for growth, income or a blend of both. NASDAQ exposure is usually growth-tilted, so make sure it fits your objectives and risk appetite. 

Next steps

The NASDAQ is a window into global growth themes, from AI and software to semiconductors, digital platforms and more. For investors planning how to invest in NASDAQ from Australia, the key is to choose your asset type (individual shares, ETFs, index instruments) in accordance with your goals and risk tolerance. 

Start investing in the NASDAQ from Australia with CMC Invest by opening an account. 

This article provides general information only. Past performance is not a reliable indicator of future results. It is not to be construed as a solicitation or an offer to buy or sell any financial instruments, or as a recommendation and/or investment advice. It does not intend to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any financial instruments. CMC Invest believes that the information in this article is correct, and any opinions and conclusions are reasonably held or made on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this article. CMC Invest is under no obligation to, and does not, update or keep current the information contained in this document. Neither CMC Invest nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this document. Any opinions or conclusions set forth in this article are subject to change without notice and may differ or be contrary to the opinions or conclusions expressed by any other members of CMC Invest.