When going through an initial public offering (IPO) process, a company must make the important decision of choosing the securities exchange on which to list its shares. For most U.S.-based companies undertaking an IPO, this choice is between the New York Stock Exchange (NYSE) and the Nasdaq Stock Market LLC (Nasdaq).
The NYSE is the largest equities exchange in the world by market capitalization but has fewer listed companies than Nasdaq. However, while having fewer listed companies than Nasdaq, 70% of the companies included in the S&P 500 were listed on the NYSE as of May 2025. By contrast, the Nasdaq is the second-largest stock exchange in the world by total market capitalization but has significantly more listed companies than the NYSE.
Differences between the Exchanges
The NYSE, founded in 1792, is a storied exchange known for listing blue-chip and industrial companies. By contrast, the Nasdaq, founded in 1971, has a reputation for attracting companies focused on technology and innovation. Beyond their reputation, differences between the NYSE and the Nasdaq include the following:
- The NYSE functions as an auction market in which participants transact directly with each other, whereas market participants on the Nasdaq make purchases and sales via a market maker.
- Nasdaq's annual listing fees are generally more favorable to listed companies than the NYSE's listing fees. For example, the current maximum annual listing fee for companies listed on the NYSE is $500,000, compared to a maximum annual listing fee for companies listed on Nasdaq of $193,000. Additionally, while the NYSE imposes a fee to list additional shares, Nasdaq does not charge a fee for the listing of additional shares.
- Companies listed on Nasdaq have the ability to participate in certain widely-recognized Nasdaq-specific indices, including the Nasdaq-100 Index (which includes 100 of the largest non-financial companies listed on the Nasdaq), which do not have an NYSE equivalent. The inclusion of companies in such recognized indices may increase the visibility and potential trading volume of companies included in any such index.
- While the corporate governance requirements of each exchange are quite similar, there are certain differences between these corporate governance requirements, with the Nasdaq's requirements being slightly less stringent on balance.
IPO Considerations
During the first half of 2025, the Nasdaq outperformed the NYSE in terms of IPO activity. During this period, there were 79 traditional IPOs (excluding special purpose acquisition companies (SPACs)) of Nasdaq-listed companies with proceeds of approximately $9 billion, compared to 15 IPOs on the NYSE over this same time period, which raised approximately $7.8 billion.
By comparison, during the first half of 2024, traditional IPOs (excluding SPACs) by Nasdaq-listed companies raised approximately $6.1 billion, while traditional IPOs (excluding SPACs) by NYSE-listed companies raised approximately $11.5 billion. Further, the NYSE has exceeded Nasdaq in terms of gross proceeds raised by all IPOs (including SPACs) during nine of the past 15 years. However, the influx of technology-related IPOs has helped strengthen the position of the Nasdaq in recent years and may continue to do so in the future.
Exchange Changes by Existing Public Companies
In recent years, certain established public companies have decided to switch exchanges. For example, during the first half of 2025, Nasdaq exceeded the NYSE with respect to companies changing exchanges, with ten companies with a combined market value of $271 billion switching to Nasdaq from the NYSE over this time, compared to five companies moving to the NYSE from Nasdaq over the same period.
The companies making the switch to Nasdaq during 2025 span a variety of industries, from consumer goods to technology. For example, leading commerce technology company Shopify Inc. moved from the NYSE to the Nasdaq in early 2025 and indicated in connection with this move that the company was excited to "be listed among the most innovative tech companies in the world."
In addition to citing the appeal of Nasdaq as an innovation-focused exchange, companies making the transition from the NYSE to the Nasdaq have highlighted the differences in fees and/or the Nasdaq-specific indices as being drivers of this change. For example, when PepsiCo, Inc. left the NYSE after nearly 100 years to list on the Nasdaq in 2017, the company disclosed that it made this change in order to achieve "greater cost-effectiveness," as well as "access to Nasdaq's unique portfolio of tools and services to connect with [their] investors more efficiently." Additionally, in 2024, Palantir Technologies Inc. noted its expectation to be included on the Nasdaq-100 in its announcement related to its switch to the Nasdaq. The Campbell's Company cited the same rationale, along with cost savings, in its decision to transition from the NYSE to the Nasdaq in 2024.
Conversely, companies that have recently moved from Nasdaq to the NYSE have cited the size and prestige of the NYSE in making this change. For example, financial services firm Virtu Financial, Inc. and industrial growth company CSW Industrials, Inc. when announcing its move from the Nasdaq to the NYSE earlier in 2025, noted the fact that they would be joining the "world's largest stock exchange" in press releases announcing their respective moves. CSW Industrials also cited the NYSE's ability to "provide additional liquidity and enhanced visibility to [its] stockholders" as a reason for moving to the NYSE.
Corporate Governance Requirements
Companies should also consider the corporate governance requirements of the NYSE and Nasdaq when assessing the differences between these exchanges. Overall, the corporate governance requirements of the NYSE and Nasdaq are substantially similar, including with respect to the independence requirements applicable to a listed company's board of directors and standing board committees. Despite these overall similarities, there are certain differences between the corporate governance requirements of each exchange, and on balance, Nasdaq has slightly less stringent requirements in certain respects.
For example, in contrast to NYSE-listed companies, Nasdaq-listed companies are not required to:
- Establish a nominating / corporate governance committee or adopt corporate governance guidelines (although most established Nasdaq companies have an independent corporate governance committee and maintain corporate governance guidelines voluntarily).
- Have an internal audit function (although most Nasdaq-listed companies nevertheless have such an internal audit function).
- Submit an annual affirmation regarding details of compliance with corporate governance listing standards (as is required of NYSE-listed companies).
However, despite certain differences in corporate governance requirements as highlighted above, in practice, the differences between these requirements of the NYSE and Nasdaq tend to be relatively minor or academic.
Summary
In sum, while the differences between the NYSE and Nasdaq should not be overstated, companies that are considering an IPO, as well as established public companies, should be mindful of the differences between these exchanges.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
