What happened?
Railroad operator CSX (NASDAQ:CSX) has switched to a new track, and is motoring ahead -- at least, in terms of its inclusion on a key index. On Monday, the company became the newest component of the Nasdaq-100 index -- the exchange's grouping of its largest nonfinancial companies in terms of market capitalization.

CSX takes the place of KLA-Tenor, a company that makes equipment for semiconductor manufacturers. KLA-Tenor is being acquired by Lam Research in a deal worth nearly $11 billion that was agreed to last October.

Late last year, CSX transferred its stock listing to the Nasdaq, from its former home on the New York Stock Exchange.

The Nasdaq-100 is comprised of a variety of well-capitalized stocks from the exchange. Many are very prominent, such as Apple, Costco Wholesale, and Kraft Heinz.

Does it matter?
Inclusion on a well-known index is a boon for any stock. After all, a great many exchange-traded funds are mandated to build their portfolios strictly from these issuers. Also, other types of funds regularly trawl the indexes for goodies. The resulting increased demand will be a positive factor supporting CSX's share price.

It could use the help. The stock has lost more than 30% of its value over the past year, significantly underperforming major indexes such as the Dow, the S&P 500, and -- yes -- the Nasdaq-100.

So inclusion on the latter is a good thing for CSX. But it'll need to improve its fundamentals in order to help its new index move north. For example, the company posted year-over-year revenue declines in three of the four quarters in its fiscal 2015.

Eric Volkman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Costco Wholesale, and recommends CSX. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.