A federal appeals court struck down Nasdaq’s (NDAQ) diversity rules in another setback for DEI initiatives in corporate America. The Fifth Circuit Court of Appeals ruled 9-8 that the Securities and Exchange Commission (SEC) should not have approved Nasdaq’s 2021 policy requiring companies listed on its stock exchanges to have at least one female and one minority/LGBTQ board member or explain their lack of diversity.
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The judges argued that the rule violated securities law, as it did not align with the Exchange Act’s primary goals of protecting investors and preventing market manipulation. In a dissenting opinion, five judges argued that the court overstepped by interfering with Nasdaq’s business judgment, which was influenced by investor behavior. The ruling highlights growing resistance to diversity initiatives across major corporations.
Conservative pushback against “woke” policies has gained traction in 2024 and reflects broader changes in corporate attitudes toward DEI strategies. Companies like Walmart (WMT), Lowe’s (LOW), and Tractor Supply (TSCO) have scaled back diversity programs. Indeed, Walmart even dropped the term “DEI” while also halting its Center for Racial Equity and removing sexual and transgender products marketed to children. Other firms, including John Deere (DE) and Harley-Davidson (HOG), have also pulled back on diversity initiatives.
Is NDAQ Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NDAQ stock based on 11 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 46% rally in its share price over the past year, the average NDAQ price target of $83.40 per share implies 2.8% upside potential.
