Record highs! Is it too late to buy the Nasdaq 100 (NDQ) ETF on the ASX?

AI mania is taking the tech-centric index to new heights. Should investors hold off on buying into the local Nasdaq ETF?

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While we were asleep last night, a momentous milestone occurred at the other end of the planet.

Wall Street's tech cathedral, the Nasdaq Composite Index (NASDAQ: .IXIC), firmly planted its flag beyond the 17,000-point barrier. The record is nudging locally traded Betashares Nasdaq 100 ETF (ASX: NDQ) higher today.

Following the overnight rally, the Nasdaq is up 15.3% year-to-date in a year dominated by artificial intelligence (AI). The rapid return from the more tech-focused corner of the stock market is a world away from the measly 1.1% increase cobbled together by the S&P/ASX 200 Index (ASX: XJO).

Still, no one wants to succumb to FOMO (fear of missing out). So, does it make sense to buy the NDQ exchange-traded fund on the ASX when the Nasdaq is at its highest point in history?

Record-breaking heights on the Nasdaq

Firstly, it's important to understand what is fuelling the historic high.

The Nasdaq Composite is a market capitalisation-weighted index. The bigger the company, the more influential it is on the entire index. Roughly half of the Nasdaq is weighted towards the 10 largest companies in its arsenal.

As the table below shows, these 10 technology heavyweights — bar Apple and Tesla — have had a tremendous run this year.

CompanyYear-to-date return
Microsoft Corp (NASDAQ: MSFT)16.0%
Apple Inc (NASDAQ: AAPL)2.3%
Nvidia Corp (NASDAQ: NVDA)136.8% Inc (ASX: AMZN)21.5%
Broadcom Inc (NASDAQ: AVGO)30.1%
Meta Platforms Inc (NASDAQ: META)38.6%
Alphabet Inc (NASDAQ: GOOG)27.6%
Costco Wholesale Corporation (NASDAQ: COST)25.0%
Tesla Inc (NASDAQ: TSLA)-28.9%
Netflix Inc (NASDAQ: NFLX)38.5%
Data as of 11.35am AEST

However, it would be a glaring omission to not acknowledge the extent of Nvidia's hand in the Nasdaq record-breaking. No other company in the top 10 has slam-dunked as hard as this computer chip in the past month.

Shares in Nvidia are up 30% in the last 30 days alone. Last night, the AI-powering powerhouse ratcheted its share price up 7.1% to a record US$1,140.59 at the close — playing a pivotal role in the Nasdaq achieving its own record.

Too late to buy NDQ on the ASX?

The Nasdaq 100 ETF on the ASX provides a simple option for local investors to tap into the tech titans abroad.

At midday, the ETF trades at $42.93 per unit, less than 1% from its all-time high.

Let's get the obvious out of the way. The 'record high' shouldn't be too important in deciding whether to invest in a company, index, or ETF. A company isn't conscious of its price. What is much more vital is the future earnings potential.

No one can predict the future. We can merely make informed best guesses at what's to come. Then, it becomes a question of… do you think the companies inside the ASX-listed NDQ ETF will continue to deliver market-beating earnings growth over the years ahead?

If yes — then it's not too late, despite the Nasdaq's record high.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Motley Fool contributor Mitchell Lawler has positions in Apple, Meta Platforms, and Tesla and has the following options: long June 2025 $510 calls on Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, BetaShares Nasdaq 100 ETF, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Apple, Meta Platforms, Microsoft, Netflix, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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