Cognizant Removed from Nasdaq-100 in Latest Rebalance as AI and Semiconductor Stocks Gain Investor Attention

IT services giant Cognizant is set to be removed from the Nasdaq-100 Index later this month as the benchmark undergoes a major quarterly reshuffle, reflecting Wall Street's growing preference for artificial intelligence (AI) and semiconductor-related companies.

Cognizant to Exit Nasdaq-100 This Month as Index Rebalances Towards AI-Driven Companies

Nasdaq announced on June 11 that Cognizant will no longer be part of the technology-heavy index following its latest quarterly rebalancing exercise, which will take effect before the market opens on June 22. Along with Cognizant, companies including Charter Communications, Insmed, Verisk Analytics, and Zscaler will also be excluded from the index.

CoreWeave, Astera Labs Among AI-Focused Firms Joining Nasdaq-100

The reshuffle will pave the way for a fresh set of companies that have gained prominence due to the accelerating AI revolution. New entrants include AI infrastructure and semiconductor-focused firms such as CoreWeave and Astera Labs, highlighting the market's increasing appetite for businesses powering next-generation computing and AI workloads.

The Nasdaq-100, which represents the performance of 100 of the largest non-financial companies listed on the Nasdaq stock exchange, has become a key benchmark for global technology investors. More than 200 investment products worldwide track the index, collectively managing assets exceeding $800 billion.

The changing market sentiment has particularly favored semiconductor leaders such as Nvidia, Micron Technology, and Advanced Micro Devices (AMD), as companies across industries continue to increase spending on AI infrastructure, data centers, and advanced computing capabilities.

Market experts emphasise that a company's removal from the Nasdaq-100 should not be viewed as an indication of weak operational performance. The quarterly rebalance is based on the index's methodology, including changes in market capitalization, sector representation, and overall composition.

However, the move does indicate the changing priorities of investors, who are increasingly allocating capital toward companies directly associated with AI development and deployment.

Nasdaq-100 Rebalance May Trigger ETF and Passive Fund Portfolio Changes

The index reshuffle is also expected to trigger portfolio adjustments among passive investment funds and exchange-traded funds (ETFs) that mirror the Nasdaq-100, potentially leading to changes in their holdings of the affected companies.

AI Disruption Concerns Continue to Influence Software Sector

The developments come at a time when investors are closely monitoring how artificial intelligence will reshape the software industry. While Nvidia Chief Executive Officer Jensen Huang recently argued that AI could make it an exceptionally promising period for software companies rather than replacing them, concerns over AI-driven disruption have persisted.

Several brokerages have highlighted potential challenges for established consulting and software services firms, including companies such as Accenture, resulting in analyst downgrades and reductions in target prices.

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