The Nasdaq Composite Index is a popular market capitalization-weighted stock market index. It is comprised of more than 3,300 common equities and similar securities, like ADRs, which are traded on the Nasdaq exchange. Along with the Dow Jones Industrial Average (DJIA) and the S&P 500 index, it is one of the three most-followed indexes of the American stock markets. Based on the market cap, the most-valued companies included in the index are Microsoft Corp. (MSFT), Amazon.com, Inc. (AMZN), Apple, Inc. (AAPL), Alphabet, Inc. (GOOGL) and Facebook, Inc. (FB).
Opening 2018 just above the 7,000 mark, the gauge closed the year down almost 7.5 percent. The Nasdaq touched a high of 8,109 and the year's low of 6,777 in the interim. Big gains made during the first half of the year primarily in the technology, consumer cyclical, and media sector stocks were nullified in the later half. In the previous year 2017, the index returned a healthy annual gain of more than 28 percent, while the predictions for 2019 expects it to hit a low range of around 6,900 around April-May and then moving to 7,880 by December of next year.
Here’s a look at the top performing individual stocks of the Nasdaq index for the year 2018. The list is presented in the order of year-to-date (YTD) performance based on the opening stock price as of Jan. 2, 2018 and closing price as of Dec. 14, 2018.
1. Workday, Inc. (WDAY)
- Market Cap: $35.06 billion
- Price Change: +$58.63
- Performance against the Nasdaq Composite: +57%
2. Illumina, Inc. (ILMN)
- Market Cap: $47.45 billion
- Price Change: +$102.43
- Performance against the Nasdaq Composite: +46%
3. O'Reilly Automotive, Inc. (ORLY)
- Market Cap: $27.55 billion
- Price Change: +$98.91
- Performance against the Nasdaq Composite: +40%
4. Twenty-First Century Fox, Inc. (FOXA)
- Market Cap: $91.14 billion
- Price Change: +$13.20
- Performance against the Nasdaq Composite: +37%
5. Netflix, Inc. (NFLX)
- Market Cap: $118.48 billion
- Price Change: +$65.77
- Performance against the Nasdaq Composite: +32%
The Pleasanton, Calif.-based Workday, Inc. (WDAY) is a global provider of enterprise cloud applications and solutions for human capital management (HCM). The stock had a modest run throughout the year, and the big jump came in November when the company managed to surpass the earlier announced management's guidance for revenue for its fiscal third-quarter 2019. It helped the per-share earnings jump to $0.31 cents per share, more than double what analysts on the Street predicted ($0.14).
The company also expanded its products by launching the artificial intelligence-powered Workday People Analytics suite and on-boarding of many new Fortune 500 customers to the Workday community. In addition to topping the revenue and earnings estimates in the prior quarter, Workday acquired business-planning company Adaptive Insights for $1.5 billion. The acquisition is expected to fast-track the planning roadmap by more than two years by integrating the latter’s Business Planning Cloud platform into Workday offerings. The stock has returned around 57 percent during the year making it the best performer in the Nasdaq Composite index.
The DNA sequencing player Illumina, Inc. (ILMN) stands second in the list of best performing Nasdaq companies with around 46 percent annual returns. The company is a leader in sequencing technologies which are used for understanding genetic changes in healthcare, disease, and medicinal response. During the first half of 2018, the stock managed to build on the previous year’s momentum with the launch of a new desktop DNA sequencing system called the iSeq 100. In October, the company posted the highest sales in three years for its sequencing systems led by NovaSeq and iSeq product lines.
Beyond the hardware systems, the company has focused on consumable product offerings — like chemical reagents and kits — and benefited by establishing recurring streams of revenue. The company has also made good strides in oncology diagnostics and is building a portfolio of genetic tests for use in clinical trials with industry leaders like Bristol-Myers Squibb and Loxo Oncology. In November, the company announced that it had acquired Pacific Biosciences, Inc. (PACB) for $1.2 billion, which was well received by the market. Big synergies are expected in PacBio’s long-read sequencing technology with Illumina’s short-read sequencing platforms. That may allow Illumina to significantly reduce operating costs and expand into new markets in 2019.
O'Reilly Automotive, Inc.
The Springfield, MO-based O'Reilly Automotive, Inc. (ORLY) — which is in the retailing of automotive aftermarket parts, tools, supplies, equipment, and accessories businesses — garnered around 40 percent annual return in 2018. The steady upward run all throughout the year has been based on fundamental growth in business with a consistent increase in revenue. In April, the stock price jumped more than 10 percent following the announcement of an earnings beat. The company again surpassed street expectations in October, making that quarter the fourth in a row that the company topped market estimates. As the percentage of the population with automobiles grows, O'Reilly should continue to see growth in the automotive replacement parts and maintenance items segments.
Twenty-First Century Fox, Inc.
The New York-based diversified media and entertainment company Twenty-First Century Fox, Inc. (FOXA) generated around 37 percent returns in 2018. After a steady start to the year, the company managed to beat analysts' expectations for both earnings per share and revenue during the fiscal fourth-quarter earnings announced in August. Though it marginally missed estimates for the first-quarter fiscal 2019 results announced in November, it reported an increase in affiliate and advertising revenues. In July, The Walt Disney Co. (DIS) secured shareholders nod to purchase FOXA for $71.3 billion after spinning-off of certain assets. The major corporate development led to a spike in share price to a level that the stock continues to hold onto and has helped Twenty-First Century Fox stand among the winning Nasdaq stocks for the year.
The leading provider of over-the-top (OTT) content, Netflix, Inc. (NFLX) stands fifth in the list of best performing NASDAQ stocks of 2018 with around 32 percent annual returns. Global expansion and increasing count of subscribers, who found Netflix’s original content highly engaging, resulted in higher revenues and earnings. Netflix started the year with a bang, and January alone generated 41 percent monthly gain. The stock managed to hit more than 100 percent year-to-date (YTD) returns in June and July.
While the stock gained on the company consistently meeting or beating street expectations with increasing subscriber count, the summer season saw a decline as Netflix viewers switched to the soccer world cup. The stock continued its decline through the later part of the year as competitors like Amazon Prime and Walt Disney got aggressive. Disney is expected to launch its Disney+ streaming service in 2019, which risks taking away all of Disney content from the Netflix platform. Similar risks exist from another giant AT&T Inc. (T), which is rumored to be plotting its own streaming service after the acquisition of HBO parent Time Warner. Doing so would result in a significant loss of popular content from Netflix, heightened competition in the digital streaming market, and future declines in stock price. In October, Netflix announced plans to raise $2 billion debt capital to fund the production of original content despite rising interest rates, which did not sit well with the Street. Even after losing on mid-year gains, Netflix still managed to retain a spot among top five best performing Nasdaq stocks.