Nasdaq quarterly profit rises on trading boom amid volatility

The core signal is not that exchange revenues rise in volatile tape—that is known—but that the mix is shifting toward more resilient monetization. When cash equities/options turnover spikes, it lifts the headline trading line quickly; more importantly, it creates a lagged pull-through into data, listings, and software where pricing is stickier and less cyclical. That makes NDAQ less of a pure volatility beta than CME, but also means the current setup is better for margin durability than for a one-quarter earnings pop.

The second-order effect is on the IPO complex. Elevated macro and geopolitical uncertainty does not just delay listings; it tends to compress the window where bankers can confidently price new deals, which can push a meaningful portion of 2026 issuance into the back half of the year. That creates a “cliff then catch-up” pattern: near-term fee visibility weakens, but if volatility normalizes even modestly, pent-up supply can reaccelerate listings sharply, supporting NDAQ’s data/listing revenue more than the street is probably modeling.

Relative value still looks skewed to CME over NDAQ on a near-term basis because CME is the cleaner expression of hedging intensity across rates, FX, and commodities, while NDAQ is more exposed to the fragile IPO reopening narrative. ICE is the cleaner contrarian if equity volatility persists but rate volatility fades, because its mix is less directly dependent on equity risk appetite. The market seems to be rewarding the obvious volatility beneficiaries while underappreciating that persistent geopolitical stress can keep volumes elevated longer than a single quarter, but also delay the higher-margin issuance rebound that would re-rate NDAQ.

The main risk to this trade is a fast de-escalation in the Middle East or a broad vol crush, which would hit transaction revenue before recurring revenue can fully offset it. The longer-duration bullish case is a second-half 2026 IPO restart: if that happens, NDAQ’s operating leverage should improve materially, and current relative weakness versus peers looks too punitive. For now, this is a timing trade more than a structural thesis.