Market Capitalization
Definition
The total value of a company's outstanding shares. Calculated by multiplying stock price by shares outstanding. Used to categorize companies: micro-cap (<$250M), small-cap ($250M-$2B), mid-cap ($2B-$10B), large-cap ($10B+), mega-cap ($200B+).
Related Terms
Large Cap
Companies with a market capitalization over $10 billion. Large-cap stocks (Apple, Microsoft, Amazon) tend to be more stable but grow slower than small caps. The S&P 500 is a large-cap index.
Small Cap
Companies with a market capitalization between $250 million and $2 billion. Small-cap stocks historically offer higher returns than large caps but with greater volatility and risk. The Russell 2000 is the primary small-cap index.
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