Skip to content
← Learn the Basics

Roadmap · Level 6

Market Cap

The total value of a company, according to the stock market.

Market capitalization (market cap) is the total dollar value of all a company's shares combined — calculated as share price × total number of shares.

Picture it

Company A

$10 a share × 100 million shares

Worth $1 billion

Company B

$500 a share × 1 million shares

Worth $500 million

Company B's shares cost 50 times more, but Company A is the bigger company, because it has far more shares. Share price alone doesn't tell you a company's size.

Companies are often grouped by size: "large-cap" (generally over $10 billion) tend to be established, stable companies. "Mid-cap" and "small-cap" companies are smaller and often riskier, but can have more room to grow. Market cap tells you the size of a company — not necessarily whether it's a good investment.

← Back to the Roadmap (this is part of Level 6)