The total market value of a company's outstanding shares.
Market capitalization (market cap) is the total market value of a company's outstanding stock, calculated as share price × number of shares outstanding. For example, if a company has 1 billion shares trading at $50, its market cap is $50 billion. Market cap categorizes companies: large-cap ($10B+), mid-cap ($2B–$10B), small-cap ($300M–$2B), and micro-cap (under $300M). Large-cap companies are typically established, stable, and less volatile; small-cap companies are newer, riskier, but potentially higher-growth. Index funds often focus on market-cap-weighted portfolios (where larger companies have bigger portfolio weights). Market cap is a useful way to assess company size and relative valuation compared to peers.