Market Capitalization

What is Market Capitalization? — Definition

Market capitalization (market cap) = Share Price × Total Shares Outstanding. It's the simplest measure of a company's size as valued by the stock market. Companies are typically categorized as micro-cap (<$300M), small-cap ($300M–$2B), mid-cap ($2B–$10B), large-cap ($10B–$200B), and mega-cap ($200B+).

Market cap is important for understanding a stock's investment profile. Large-caps tend to be more stable and liquid. Small-caps can grow faster but carry more risk. Market cap is also different from enterprise value — it doesn't account for debt or cash on the balance sheet.

Example

Apple became the first company to reach a $3 trillion market cap in 2023. With approximately 15.5 billion shares outstanding, each dollar change in Apple's share price shifts its market cap by $15.5 billion — illustrating the massive scale of mega-cap companies.

BMInsider's Portfolio Tracker automatically calculates your portfolio's weighted average market cap exposure, helping you understand whether you're tilted toward large, stable companies or smaller, faster-growing ones.