Market Capitalization | Market Capitalization Categories

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 14, 2022

What Is Market Cap

Market capitalization, or market cap, is the combined value of a company’s outstanding stock. It is an estimate of the total value of a company.<h2>Market Cap Categories</h2> People often divide companies into different size categories based on their market caps:

  • Micro-cap: Market cap under $300 million.
  • Small-cap: $300 million to $2 billion.
  • Mid-cap: From $2 billion to $10 billion.
  • Large-cap: Greater than $10 billion.

Some have also used the terms mega-cap to refer to companies over $200 billion, and nano-cap for companies under $50 million.

However, there are no exact definitions for any of these categories, so the cutoffs can vary greatly.

Market Capitalization | Market Capitalization Categories FAQs

What does Market Cap stand for?

Market Cap is short for Market Capitalization.

What is Market Cap?

Market Capitalization is the aggregate dollar-value of all outstanding shares of a company’s stock.

Why do investors look at a company's Market Cap?

A company’s market cap is the first way an investor assesses how “big” a company is.

Is a company's Market Cap the true value of the company?

It is important to remember that a company’s market cap may be different than the true economic worth of their assets and ability to generate profits—market cap can be viewed as what the markets perceive a company to be worth.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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