Glossary · Defined term
Market capitalization
Market capitalization is the total market value of a company's shares: share price multiplied by shares outstanding.
Last updated Oct 2, 2026
What it means
Market capitalization is the total market value of a company's outstanding shares, calculated by multiplying the share price by the number of shares outstanding. It is the standard way to describe company size: large-cap generally means over about $10 billion, mid-cap roughly $2 to $10 billion, and small-cap below $2 billion, though the exact cutoffs shift over time. Market cap matters because size correlates with traits investors care about, such as stability, analyst coverage, and index membership. It is a market opinion of value, not a measure of the company's assets or cash. Two companies with the same market cap can have very different businesses underneath.
An example
For illustration, a company with 1 billion shares trading at $30 has a market capitalization of $30 billion, placing it firmly in large-cap territory. If the share price doubles to $60 with no new shares issued, the market cap doubles to $60 billion. The business itself did not issue anything new; the market simply values it more.