How QQQ Holdings Are Weighted, and Capped

QQQ holdings are weighted by modified market capitalization: the fund tracks the Nasdaq-100, the index sizes each member by its market value, and a written set of caps then trims the largest positions back. Weights are struck on a scheduled reference date, then adjusted downward whenever one company, or the large companies as a group, sits above a threshold in the methodology. Everything below comes from the 2026 edition of the Nasdaq-100 Index Methodology, the copy current as of September 2026.

What sets a QQQ holding's weight

Market capitalization is share price multiplied by shares outstanding, and our guide to market capitalization and shares outstanding walks that arithmetic. The index does not weight on the raw figure. It uses Modified Market Capitalization, which counts only eligible listed share classes and disregards foreign-listed and unlisted shares. For a security with a small free float, the shares outstanding used in the calculation are capped at three times the free-floating shares, which keeps a lightly traded name from claiming a weight nobody could buy.

Multiple share classes of the same issuer are each eligible on their own, and the company's capitalization is the combined figure of those securities. A company with two listed classes is one company and two securities, and that distinction decides which cap applies.

The starting input is still plain market value. The panel below takes 11 of the index's largest listed securities and measures each one's share of that group's combined market capitalization.

WITH mcaps AS
(
    SELECT
        ticker,
        argMax(toFloat64(market_cap), date) AS mcap
    FROM global_markets.stocks_ratios
    WHERE ticker IN ('AAPL','MSFT','NVDA','AMZN','AVGO','META','GOOGL','GOOG','TSLA','NFLX','COST')
      AND date >= today() - 45
      AND market_cap > 0
    GROUP BY ticker
)
SELECT
    ticker                                               AS symbol,
    round(mcap / 1e12, 3)                                AS market_cap_trillions,
    round(100 * mcap / (SELECT sum(mcap) FROM mcaps), 2) AS share_of_group_pct
FROM mcaps
ORDER BY mcap DESC

NVDA carries $5.423 trillion of market value, 17.56% of the group total, against 0.97% for NFLX at the other end of the bar chart. Those are not the fund's published weights: the real calculation runs across all 100 members, on modified capitalization, with the caps below applied on top.

The capping rules, in the methodology's own numbers

Two company-level constraints are applied at every scheduled rebalance, in order.

1. If any company's initial weight exceeds 24%, weights are adjusted until no company's weight exceeds 20%.
2. Any remaining company weights above 4.5% are added together. If that sum is 48% or greater, the group has its aggregate weight adjusted down to 40%.

If either constraint is still breached after both stages, the process repeats until both hold.

The December reconstitution adds a second layer, applied to securities rather than companies.

1. If any security's initial weight exceeds 15%, weights are adjusted until no security exceeds 14%.
2. The five largest resulting security weights are added together. If they sum to 40% or greater, that group is adjusted down to 38.5%, and every security outside the five largest is capped at the lesser of 4.4% or the weight of the fifth-largest security.

Notice what the procedure is not: there is no fixed 20% ceiling sitting over the index at all times. The caps bite only at a rebalance, on the numbers as of the reference date. Between rebalances a member's weight floats with its price, and it can drift above the level the last rebalance set.

The calendar QQQ's weights actually follow

Three events can move a weight, and each has a published date.

The Annual Reconstitution and Rebalance runs in December. Companies are ranked on Full Market Capitalization as of the last trading day of November. The top 75 rank in automatically, current members inside the top 100 are retained, and the remaining seats are filled in rank order down to 125th. Changes are announced after the close on the sixth trading day prior to the effective date, which falls at market open on the first trading day after the third Friday in December.

Quarterly maintenance runs in March, June, September and December, with reference dates on the last trading day of February, May, August and November. Index shares are adjusted for changes in total shares outstanding, constituents ranked outside the top 125 are removed and replaced, and the company-level caps are reapplied. Effective dates follow the December rule.

Index funds match the new weights around that moment, and the tape keeps the fingerprint.

WITH dec_days AS
(
    SELECT
        toYear(date)                                                   AS yr,
        toFloat64(volume)                                              AS vol,
        toDayOfWeek(date) = 5 AND toDayOfMonth(date) BETWEEN 15 AND 21 AS is_recon_friday
    FROM global_markets.stocks_daily_aggs
    WHERE ticker = 'QQQ'
      AND toMonth(date) = 12
      AND date >= '2016-12-01'
)
SELECT
    toString(yr)                                                            AS year,
    round(maxIf(vol, is_recon_friday) / 1e6, 1)                             AS recon_friday_volume_mn,
    round(avgIf(vol, NOT is_recon_friday) / 1e6, 1)                         AS other_december_volume_mn,
    round(maxIf(vol, is_recon_friday) / avgIf(vol, NOT is_recon_friday), 2) AS recon_day_ratio
FROM dec_days
GROUP BY yr
HAVING countIf(is_recon_friday) > 0 AND countIf(NOT is_recon_friday) > 0
ORDER BY yr

In December 2025, QQQ traded 60.4 million shares on the reconstitution Friday against an average of 47.8 million on the month's other sessions, a ratio of 1.26. Read that column as a multiple, where a value above 1 marks a Friday heavier than a typical December session. One caveat belongs on the chart: that same Friday is a quarterly derivatives expiration, when index futures and options settle together, and the session carries both events at once. Our comparison of NDX and QQQ options takes the expiry side of it.

Between the scheduled dates, the methodology keeps one more lever. A Special Rebalance may be conducted when either weighting constraint is breached on end-of-day values: no company's weight may exceed 24%, and the aggregate weight of the companies whose weights exceed 4.5% may not exceed 48%.

That lever has been pulled. On July 7, 2023, Nasdaq published a notice setting a Special Rebalance for the Nasdaq-100 effective prior to the market open on Monday, July 24, 2023, with Monday, July 3, 2023 as the reference date.

Generally speaking, the weights of the very largest companies will be reduced, with the excess weight being redistributed across the remainder of the index members.
Nasdaq, "The Nasdaq-100 Index Special Rebalance", notice dated July 7, 2023

No company entered the index that day and none left. Only the weights moved, which is the character of a special rebalance.

What makes a company eligible for the Nasdaq-100

Eligibility is a venue test before it is anything else. A company must be primarily listed on a U.S. Nasdaq-affiliated exchange, with the Nasdaq Capital Market excluded. It must not be classified in the Financial Industry under the Industry Classification Benchmark. SPACs and when-issued securities are not eligible at all, and a security needs a three-month average daily value traded of at least $5 million before the applicable reference date.

Nothing in that list mentions technology. The index holds the largest Nasdaq-listed non-financial companies, and plenty of them sell soda or run freight railroads. The panel below takes 12 index members from outside the technology sector and measures the money that changes hands in each one per session.

SELECT
    ticker                                                    AS symbol,
    round(avg(toFloat64(close) * toFloat64(volume)) / 1e6, 1) AS avg_daily_value_mn
FROM global_markets.stocks_daily_aggs
WHERE ticker IN ('PEP','COST','AMGN','GILD','SBUX','MDLZ','CSX','CTAS','ODFL','PCAR','FAST','MNST')
  AND date >= today() - 95
GROUP BY ticker
HAVING count() > 20
ORDER BY avg_daily_value_mn DESC

COST tops that group at $2038.2 million a session, and the thinnest name on the list, ODFL, still turns over $346.3 million. The $5 million screen is a floor for the eligible universe, far below where names of this size trade.

One expedited path exists outside the calendar. A company may be added on a Fast Entry basis when its Full Market Capitalization ranks inside the top 40 of current members, and that addition does not require a removal. We follow that route in the mechanics of a Nasdaq-100 index add.

How an index change reaches the fund

A common picture has the fund waking up on the effective date and buying the new member at the opening bell. That is not the plumbing. QQQ shares are created and redeemed in large blocks by authorized participants, which deliver a basket of the underlying securities and receive fund shares, or return fund shares for the basket. When the index composition changes, the published basket changes alongside it, and the arbitrage between the fund's market price and the value of its basket keeps the two in line. Creation and redemption covers that loop properly.

FAQ

Is QQQ market cap weighted?

It is modified market capitalization weighted. Members are sized by market value at each reference date, using only eligible listed share classes, and caps then pull the largest weights down before the weights go live.

How often does QQQ rebalance?

The underlying index reconstitutes once a year in December and rebalances quarterly in March, June, September and December, effective at the open on the first trading day after the third Friday. A Special Rebalance can be run at other times when a weighting constraint is breached.

What is the 4.5% rule in the Nasdaq-100?

At each rebalance, every company weighing more than 4.5% of the index is added together. If that cohort sums to 48% or more, its aggregate weight is adjusted down to 40% and the excess is spread across the rest of the index.

Does the Nasdaq-100 hold only technology companies?

No. Eligibility turns on the listing venue and the industry exclusion, so the index holds the largest Nasdaq-listed companies that are not classified as financials, including food, beverage, healthcare, retail and transport names.

Every panel ships with the SQL that produced it, so you can check the counting yourself. To measure a different basket, or a different December, ask in plain English on the Strasmore terminal.