CompanyGraph
Multiplies share price by total shares outstanding, exposing the market's aggregate valuation of the entire equity at a single point in time.
Market capitalization is the total value of all a company's shares at the current share price. It's a quick way to see how big the company is in the stock market.
Market capitalisation (market cap) represents the total market value of a company's outstanding shares. As the most widely used measure of company size in the stock market, it determines index membership, investment style classifications, and peer group comparisons. Market cap fluctuates continuously during trading hours as share prices change.
The calculation multiplies share price by shares outstanding:
Market Cap = Current Share Price × Shares Outstanding
For example, a company with 500 million shares outstanding trading at $40 per share has a market cap of $20 billion.
Market cap classifications vary but generally follow these ranges:
- Mega-cap: $200 billion+ (Apple, Microsoft, Amazon)
- Large-cap: $10-200 billion (established industry leaders)
- Mid-cap: $2-10 billion (growing companies with track records)
- Small-cap: $300 million-2 billion (smaller, often less established firms)
- Micro-cap: $50-300 million (very small, often thinly traded)
- Nano-cap: Under $50 million (highly speculative)
Market cap matters because it:
- Determines index inclusion: S&P 500 requires substantial market cap for eligibility
- Influences institutional interest: Large funds often have minimum market cap requirements
- Affects liquidity: Larger market caps generally correlate with higher trading volumes
- Suggests risk profile: Larger companies tend to be more stable; smaller caps more volatile
Important distinctions:
- Market cap vs. enterprise value: Enterprise value adds debt and subtracts cash, giving total business value
- Market cap vs. book value: Market cap reflects investor sentiment; book value reflects accounting assets minus liabilities
- Free-float market cap: Some indices use only tradeable shares, excluding closely held stock
A high market cap doesn't mean a stock is expensive—a $500 billion company might be fairly valued while a $5 billion company is overpriced. Market cap indicates size, not valuation. Compare price-to-earnings, price-to-sales, and other ratios to assess whether the market cap is justified by the underlying business fundamentals.
How it relates
Closing PriceClosing price is the last traded price of the period. It's the most common reference price for charts and indicators.×Shares OutstandingShares outstanding is the total number of shares that exist for this company. It's used to calculate things like market value and earnings per share.=Market Capitalization
Market Capitalization+Total Debt (MRQ)Total debt (MRQ) is the amount of all interest-bearing debt at the end of the most recent quarter. Higher debt can increase risk but also help finance growth.−Total Cash (MRQ)Total cash (MRQ) is the amount of cash and cash-like assets the company had at the end of the most recent quarter. It shows the immediate financial buffer available.=
Where it fits
Closing PriceClosing price is the last traded price of the period. It's the most common reference price for charts and indicators.→Market Capitalization→Enterprise ValueEnterprise value estimates the total value of the business, including debt and excluding cash. It's often seen as the price a buyer would pay to acquire the whole company.
Market Capitalization→Valuation