Market capitalization is the total value of a company outstanding shares. Market capitalization is the price (or market value) that the market is currently pricing the company.
Market cap it calculated as the total number of outstanding share multiplied by the current price per share in the market.
Market Capitalisation = Number of shares outstanding x Share price
The number of shares outstanding, of publicly traded companies, is listed on a company’s balance sheet and its reported quarterly and/or annually.
Market capitalization is an easy way for investors to determine a company’s size and usual they split stocks into categories based on their market cap: large-cap, mid-cap and small-cap.
| Name | Market cap | Industry |
|---|---|---|
| MSFT Microsoft Corp | $3.04T | Software - Infrastructure |
| AAPL Apple Inc | $2.63T | Consumer Electronics |
| NVDA Nvidia Corp | $2.18T | Semiconductors |
| GOOGL Alphabet Inc | $2.14T | Internet Content & Information |
| AMZN Amazon Com Inc | $1.87T | Internet Retail |
| META Meta Platforms Inc | $1.11T | Internet Content & Information |
| BRK.B Berkshire Hathaway Inc | $871.12B | Insurance - Diversified |
Market capitalization is a quick and easy method for estimating what the “market” thinks the company it is worth (for publicly traded companies). Market capitalization is commonly used by investors to help inform their decisions about which stock to invest in because it gives them information about the relative size of one company versus another. Important to mention is that market cap represents only the equity value of a company and does not take into effect the capitalization structure of the company. A more detailed measure that takes into account the debt and other parts of the company capitalization structure (like cash) is the enterprise value metric.