What does Market Cap mean?

Market capitalization is a company's share price multiplied by its total shares outstanding — it tells you the company's overall size.

Market capitalization = share price × total shares outstanding. It tells you the company's size: small-cap (under $2B), mid-cap ($2B–$10B), large-cap (over $10B), mega-cap (over $200B). Bigger usually means less volatile.

Market Cap example

A company with 2 billion shares at $75 each has a market cap of $150 billion. If the share price rises to $90, the market cap becomes $180 billion — the business itself didn't change overnight, but its price did.

Common beginner mistake

Thinking a low share price means a small company. A $10 stock with 5 billion shares ($50 billion) is far bigger than a $300 stock with 50 million shares ($15 billion).