Glossary · Basics

Market capitalization

A company's total value based on share price × shares outstanding.

Market capitalization (market cap) estimates what the market thinks a company is worth right now. Multiply the current share price by the number of shares outstanding.

Investors often group companies by size — large-cap, mid-cap, small-cap — because size can correlate with stability, growth profile, and volatility. Market cap changes every day as the share price moves; it is a snapshot of market value, not a full valuation model by itself.

Example

A company with 200 million shares trading at $50 each has a market cap of about $10 billion.