The Dot-Com force is back at the NASDAQ. It took Silicon Valley 15 years to bring back the NASDAQ to the Dot-Com Bubble Levels. With startup valuations in the billions becoming the norm, Wall Street is following up with driving up the value of public traded tech companies.
On Monday the NASDAQ closed above 5,000 points (Nasdaq Composite closed at 5,008.10). It has been almost to the day 15 years that the NASDAQ was over 5,000. Back then we have been at the end of the Dot-Com bubble. It took 15 years for Silicon Valley to create the same value again for tech companies. This time around the situation is supposed to be very different. Now it is all about social media and not about the web. Just think Facebook, Twitter, Instagram and SnapChat.
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Is there are difference in real created value or are we inside a social media bubble? The Wall Street believes apparently that there is real value. According to Reuters, Douglas Depietro, managing director at Evercore ISI in New York says: "You've an entirely different make-up of stocks. Real earnings and revenue are driving the Nasdaq now. Anything with a website went to $100 back then."
The NASDAQ is not dominated by social media companies. Not yet at least. Many hardware companies are thriving through the growth of the web and the increase in usage including Intel, Cisco and HP.
It will be interesting to see if the Nasdaq Composite can stay above 5,000 today when the market opens.
The Nasdaq Composite peaked on March 10 with 5,048.62 (closed peak, intra-day peak: 5,132.52). The current level is about 40 below that historic mark. The last time the NASDAQ was over 5,000 points was on March 27, 2000.
About the Nasdaq Composite Index
The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The Nasdaq Stock Market. Launched in 1971, the NASDAQ Composite Index is a broad based Index. Today, the Index includes over 3,000 securities, more than most other stock market indices. The NASDAQ Composite is calculated under a market capitalization weighted methodology index.
To be eligible for inclusion in the Composite the security's U.S. listing must be exclusively on the Nasdaq Stock Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing), and have a security type of either:
- American Depositary Receipts (ADRs)
- Common Stock
- Limited Partnership Interests
- Ordinary Shares
- Real Estate Investment Trusts (REITs)
- Shares of Beneficial Interest (SBIs)
- Tracking Stocks
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