Recalling Nasdaq All-Time High

By Douglas A. McIntyre Published Sep 17, 6:58AM EDT

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March 10, 2000. Nasdaq intra-day high reaches 5,132.52 — a record. It closes at 5,048.62 — a record, too. The good times rolled. Trading today at about 3,700, it will never get back above 5,000 again. The companies in the index have too much competition.

The primary reason the record will hold forever is that investors are not stupid enough, or crazy enough, to drive the index so high. The peak pre-supposed that Microsoft Corp.’s (NASDAQ: MSFT) market value was twice what it is today. Cisco Systems Inc.’s (NASDAQ: CSCO) was so much higher then because it was the sole provider of routers, the core to the future of broadband. Cisco has several impressive competitors now. Intel Corp. (NASDAQ: INTC) had a colossal value then, based on sales forecasts for the personal computer that ran has high as infinity.

The primary reason that the index will not reach 5,000 again is not because tech has become any less attractive as an investment. It is that the largest Nasdaq stocks have too much competition. Apple Inc. (NASDAQ: AAPL) has led the index in value for three years, and its business has been shredded by Samsung and others. The company in the index that probably has the most promising future is Google Inc. (NASDAQ: GOOG). However, its growth has slowed. Its future in China, the world’s largest Internet market, is doomed. Like Microsoft, it has grown so large and has so much market share in some regions that it has become the world’s primary antitrust action target.

Amazon.com Inc. (NASDAQ: AMZN) often is mentioned as another public company with unlimited prospects. That is not true — if investors read between the lines of what founder Jeff Bezos says. He claims the most rapid growth the e-commerce company will post is at its Amazon Web Services (AWS), which is its play in cloud computing. Unfortunately, a handful of other large companies have attacked the same market — Microsoft and Google among them. Amazon, for once, faces fierce and able competition.

The balance of the major stocks in the Nasaq 100 are companies with mundane businesses, at least by the standards set for phenomenal growth. Among the largest of these are Comcast Corp. (NASDAQ: CMCSA), Costco Wholesale Corp. (NASDAQ: COST) and Netflix Inc. (NASDAQ: NFLX). Each is a juggernaut in it own right. And each is besieged by other companies that want to and can get some of its business.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.