The Nasdaq-100: Where technology isn’t just in the tech sector

Key takeaways

• The Nasdaq-100® offers exposure to innovation across sectors—not just traditional tech—through its unique, non-financial index construction. 
• Sector labels can be misleading, as many Nasdaq-100 companies classified outside of tech still drive or develop cutting-edge technologies.
• QQQ can provide investors with diversified access to tech-enabled growth, helping capture momentum in a rapidly evolving economy.

When investors think of the Nasdaq-100® Index, the word “technology” is often top of mind. That’s no surprise—many of the world’s most influential tech companies call the index home. But a closer look reveals something broader: the Nasdaq-100 isn’t just a tech index—it’s an innovation index.

Invesco QQQ ETF (QQQ), which tracks the Nasdaq-100, offers access to a portfolio of companies helping drive progress across multiple sectors, whether or not they’re officially labeled “tech.” And that distinction matters.

Innovation by design: How the Nasdaq-100 is constructed

The Nasdaq-100 is composed of 100 of the largest non-financial companies listed on the Nasdaq Stock Market, a hotbed of tech and innovation. That one rule—to exclude financials—has had long-term implications for the index’s character. Rather than reflecting traditional sector weightings like broader benchmarks, the Nasdaq-100 has tilted toward industries powered by intellectual property, scalability, and digital transformation.

While the information technology sector remains the benchmark’s largest at about 57%, it’s not alone.¹ The index also includes leaders in consumer discretionary, health care, communication services, and industrials. Many of these companies are pushing boundaries in ways that rival—or might even surpass—those in traditional tech.

Why sector labels may not tell the full story

Stock indices like the Nasdaq-100 typically use rules-based approaches like the Industry Classification Benchmark (ICB) or Global Industry Classification Standard (GICS) to determine which sector a particular company belongs in. 

In today’s economy, though, it can be difficult to peg companies into a specific sector. In other words, there can be gray areas that could leave some investors scratching their heads.

For example:

• Amazon is technically classified as a consumer discretionary company, yet it builds and sells cloud infrastructure—one of the most important technologies of the modern economy.
• Meta Platforms falls under communication services, but its work in virtual reality, artificial intelligence, and data infrastructure is undeniably tech-heavy.
• Intuitive Surgical is part of the health care sector, though its robotic systems blur the line between medicine and advanced engineering.

These examples highlight why investors looking for innovation exposure may miss the mark by focusing only on sector labels.

Three companies driving innovation beyond tech

Here are just a few examples of companies outside the information technology sector that are helping shape the future in their own domains:

• PepsiCo (consumer staples) uses digital twin technology, which creates virtual models of physical systems, to simulate and streamline its global supply chain. This allows the company to test scenarios, look to optimize operations, and, hopefully, reduce waste before making real-world changes.
• Netflix (communication services) developed one of the earliest large-scale AI-powered recommendation engines. By analyzing user behavior and content traits, it delivers highly personalized viewing suggestions that can drive engagement and retention.
• Amgen (health care) applies cutting-edge biologics and gene editing tools to accelerate drug development and target complex diseases. These technologies help enable more precise therapies and a faster path from research to clinical use.

These firms aren’t just adopting new tools—they’re hoping to build competitive advantages with them.

For investors, this matters because it means QQQ provides more than exposure to many sectors beyond the technology industry. That can be especially important in an environment where innovation is happening in unexpected places.

It also helps explain QQQ’s performance profile. While it may be compared to “tech ETFs,” QQQ includes a wider set of business models compared to strictly tech-focused funds. QQQ’s sector diversification has contributed to the fund’s ability to navigate a variety of market environments.

More than a tech story

The Nasdaq-100 isn’t just a snapshot of the technology sector—it’s a lens on the innovation economy. From AI-powered logistics to robotic surgery, some of the companies in QQQ represent the leading edge of progress, no matter what sector they are in.

For investors looking to capture that momentum, understanding what’s inside the Nasdaq-100—and why it’s built the way it is—may make all the difference.