NASDAQ 100 : Comparison of Cost of Equity (Ke) with Actual Return – Jan 2026
Valuation Parameters (Jan 2026)
- Risk-Free Rate: 4.24%
- Market Risk Premium : 4.46% (Aswath Damodaran)
- Formula: K_e = 4.24% + (beta x 4.46%)
Tier 1: The “Magnificent” & Mega Caps
The lower MRP reduces the hurdle rate, boosting the “Excess Return” (Alpha).
| Company | Ticker | Beta (β) | New Cost of Equity (Ke) | Actual 5Y CAGR | Alpha (Excess) |
| Nvidia | NVDA | 1.69 | 11.78% | +68.5% | +56.72% |
| Broadcom | AVGO | 1.15 | 9.37% | +51.3% | +41.93% |
| Alphabet (Google) | GOOGL | 1.05 | 8.92% | +29.8% | +20.88% |
| Meta Platforms | META | 1.22 | 9.68% | +18.4% | +8.72% |
| Microsoft | MSFT | 0.90 | 8.25% | +16.5% | +8.25% |
| Apple | AAPL | 1.24 | 9.77% | +14.8% | +5.03% |
| Tesla | TSLA | 2.03 | 13.29% | +9.2% | -4.09% |
| Amazon | AMZN | 1.14 | 9.32% | +8.4% | -0.92% |
Tier 2: High-Growth & Semis
Comparison of Risk-Adjusted Returns
| Company | Ticker | Beta (β) | New Cost of Equity (Ke) | Actual 5Y CAGR | Alpha (Excess) |
| AppLovin | APP | 1.85 | 12.49% | +72.1% | +59.61% |
| Palantir | PLTR | 1.55 | 11.15% | +38.5% | +27.35% |
| AMD | AMD | 1.65 | 11.60% | +31.2% | +19.60% |
| Palo Alto Networks | PANW | 1.15 | 9.37% | +28.9% | +19.53% |
| KLA Corp | KLAC | 1.35 | 10.26% | +27.4% | +17.14% |
| Applied Materials | AMAT | 1.45 | 10.71% | +26.1% | +15.39% |
| Fortinet | FTNT | 1.15 | 9.37% | +24.8% | +15.43% |
| Cadence Design | CDNS | 1.05 | 8.92% | +23.8% | +14.88% |
| The Trade Desk | TTD | 1.65 | 11.60% | +23.5% | +11.90% |
| Lam Research | LRCX | 1.45 | 10.71% | +23.1% | +12.39% |
| Synopsys | SNPS | 1.10 | 9.15% | +22.5% | +13.35% |
| Micron | MU | 1.35 | 10.26% | +20.5% | +10.24% |
| CrowdStrike | CRWD | 1.40 | 10.48% | +19.2% | +8.72% |
| Marvell Tech | MRVL | 1.40 | 10.48% | +16.5% | +6.02% |
| Datadog | DDOG | 1.55 | 11.15% | +15.4% | +4.25% |
| NXP Semi | NXPI | 1.35 | 10.26% | +14.8% | +4.54% |
| Qualcomm | QCOM | 1.25 | 9.82% | +14.5% | +4.68% |
| Analog Devices | ADI | 1.15 | 9.37% | +14.2% | +4.83% |
| Texas Instruments | TXN | 1.00 | 8.70% | +10.8% | +2.10% |
| Intel | INTC | 1.10 | 9.15% | -9.2% | -18.35% |
Tier 3: Defensive & Consumer
With a lower MRP, some “boring” stocks now look slightly better, as their hurdle rates have dropped below 8%.
| Company | Ticker | Beta (β) | New Cost of Equity (Ke) | Actual 5Y CAGR | Alpha (Excess) |
| Costco | COST | 0.78 | 7.72% | +25.1% | +17.38% |
| T-Mobile US | TMUS | 0.65 | 7.14% | +21.8% | +14.66% |
| Cintas | CTAS | 0.95 | 8.48% | +20.1% | +11.62% |
| O’Reilly Auto | ORLY | 0.85 | 8.03% | +18.9% | +10.87% |
| Intuit | INTU | 1.15 | 9.37% | +17.1% | +7.73% |
| Vertex Pharma | VRTX | 0.55 | 6.69% | +16.5% | +9.81% |
| Booking Holdings | BKNG | 1.10 | 9.15% | +16.2% | +7.05% |
| Linde PLC | LIN | 0.85 | 8.03% | +15.6% | +7.57% |
| Netflix | NFLX | 1.30 | 10.04% | +15.2% | +5.16% |
| Regeneron | REGN | 0.60 | 6.92% | +14.8% | +7.88% |
| Intuitive Surgical | ISRG | 1.15 | 9.37% | +13.8% | +4.43% |
| Marriott Intl | MAR | 1.20 | 9.59% | +12.9% | +3.31% |
| ADP | ADP | 0.80 | 7.81% | +12.8% | +4.99% |
| CSX Corp | CSX | 1.05 | 8.92% | +9.8% | +0.88% |
| Mondelez | MDLZ | 0.65 | 7.14% | +8.5% | +1.36% |
| PepsiCo | PEP | 0.56 | 6.74% | +7.9% | +1.16% |
| Cisco | CSCO | 0.85 | 8.03% | +6.5% | -1.53% |
| Honeywell | HON | 1.05 | 8.92% | +5.5% | -3.42% |
| Amgen | AMGN | 0.60 | 6.92% | +4.8% | -2.12% |
| Gilead Sciences | GILD | 0.45 | 6.25% | +4.2% | -2.05% |
| Starbucks | SBUX | 0.95 | 8.48% | +3.6% | -4.88% |
| PayPal | PYPL | 1.35 | 10.26% | -14.2% | -24.46% |
| Moderna | MRNA | 1.60 | 11.38% | -12.8% | -24.18% |
Tier 4: The Rest of the Nasdaq 100
Calculated with updated MRP of 4.46%
| Company | Ticker | Ke | Company | Ticker | Ke |
| MercadoLibre | MELI | 11.15% | Autodesk | ADSK | 9.82% |
| DoorDash | DASH | 11.15% | Microchip | MCHP | 10.71% |
| Airbnb | ABNB | 9.82% | Paychex | PAYX | 8.25% |
| Workday | WDAY | 9.82% | PACCAR | PCAR | 8.92% |
| Lululemon | LULU | 10.04% | Ross Stores | ROST | 8.70% |
| Constellation | CEG | 8.92% | Verisk | VRSK | 8.03% |
| GE HealthCare | GEHC | 8.03% | Old Dominion | ODFL | 9.15% |
| Arm Holdings | ARM | 11.38% | Copart | CPRT | 8.92% |
| Baker Hughes | BKR | 10.26% | IDEXX Labs | IDXX | 9.37% |
| Warner Bros | WBD | 11.38% | CoStar Group | CSGP | 9.59% |
| GlobalFoundries | GFS | 10.48% | Biogen | BIIB | 6.69% |
| Diamondback | FANG | 10.71% | Exelon | EXC | 6.92% |
| Roper Tech | ROP | 8.70% | AEP | AEP | 6.69% |
| Fastenal | FAST | 8.48% | Xcel Energy | XEL | 6.92% |
| Garmin | GRMN | 8.25% | AstraZeneca | AZN | 6.69% |
| VeriSign | VRSN | 8.03% | ASML | ASML | 10.71% |
| Check Point | CHKP | 7.81% | Take-Two | TTWO | 9.82% |
| Cognizant | CTSH | 9.37% | Electronic Arts | EA | 9.15% |
| Keurig Dr Pep | KDP | 6.92% | Monster Bev | MNST | 8.03% |
| DexCom | DXCM | 9.15% | Charter Comm | CHTR | 9.15% |
Note: 5-Year CAGR based on price change from Jan 2021 to Jan 2026. Data sourced from Nasdaq & Yahoo Finance market data as of Jan 20, 2026.
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