Investors in the Nasdaq Composite (NASDAQINDEX:^IXIC) were flying high again on Thursday. The index of stocks on the Nasdaq Stock Market once again dramatically outpaced the rest of the market, rising almost 1.5% compared to just a 0.1% gain for the Dow Jones Industrials.

From day to day, of course, anything can happen. But this has been a consistent theme throughout 2020. So far this year, the Nasdaq is up a stunning 26%. The Dow's actually down 2% on the year.

So what is it that's lifting the Nasdaq to such unprecedented heights? There's a combination of factors at play to give the Nasdaq its day in the sun.

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Image source: Getty Images.

The old guard is pulling its weight

One key element of the Nasdaq's success has been how well some of its biggest components have done. Like most market benchmarks, the Nasdaq Composite is weighted by market capitalization. That gives the top stocks far greater influence over the overall index than their smaller peers.

Ordinarily, when companies get big, they stop growing as fast. That's because most big businesses have already tapped into their most obvious growth opportunities, and their addressable markets have started to mature.

Yet on Thursday, investors once again saw huge outperformance from some of the biggest companies on the exchange. Netflix (NASDAQ: NFLX) weighed in with a 5% rise, while Tesla (NASDAQ:TSLA) picked up 4%.

That's been the case all year long. Tesla's up a whopping 434% on the year. Amazon.com (NASDAQ:AMZN) has added 74%, while Netflix is higher by 63%, and Apple (NASDAQ: AAPL) is up 59%.

What those big stocks do has a huge effect on the overall Nasdaq. But there's a greater paradigm shift going on that's making even those giant tech companies look up and pay attention.

COVID-19 has made cutting-edge tech more important than ever

Even if big stocks have the most mathematical impact on the Nasdaq, small companies arguably have more of a positive psychological effect. In particular, the way in which high-growth tech start-ups not only defied the coronavirus bear market but thrived during it shows the value of resilient business models.

Consider how these upstarts have done:

Moreover, the performance of these companies is restoring investor confidence in the overall stock market. Even as big-name businesses have had trouble during the coronavirus crisis, these aggressive players in fast-growing industries have shown that you can find individual companies with strong prospects. Moreover, their share prices can and will go up as they find success.

The Nasdaq has become the focal point of attention for growth investors looking for great stocks. That's not to say you can't find good investments elsewhere, but at least in 2020, the Nasdaq's been the place to be.