Market Capitalization Explained: Large-Cap, Mid-Cap and Small-Cap Stocks

Market capitalization ("market cap") is the total market value of a company's outstanding shares.

Market cap = Share price × Shares outstanding

A company with 1 billion shares trading at $50 has a market cap of $50 billion. Market cap — not share price — tells you how big a company is in the market's eyes.

Size Categories

Definitions vary, but common ranges are:

• Mega-cap: roughly $200 billion and above.
• Large-cap: roughly $10 billion to $200 billion.
• Mid-cap: roughly $2 billion to $10 billion.
• Small-cap: roughly $300 million to $2 billion.
• Micro-cap: below about $300 million.

Why It Matters

• Risk: Smaller companies tend to be more volatile and more likely to fail, but can grow faster.
• Index weighting: The S&P 500 and Nasdaq are market-cap weighted, so the largest companies drive much of their performance. See our index comparison.
• Diversification: Mixing sizes is part of a diversified portfolio.

Market Cap vs. Enterprise Value

Enterprise value adds debt and subtracts cash, giving a fuller picture of what it would cost to buy the whole business.