Market capitalization

Category:Financial analysis
Alternative names: market cap equity market capitalization

What is market capitalization

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.

How to calculate market capitalization (formula)

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.

What is a good market capitalization number

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.

Stocks with high market cap

Name Market cap Industry
MSFT Microsoft Corp $3.32T Software - Infrastructure
AAPL Apple Inc $3.24T Consumer Electronics
NVDA Nvidia Corp $3.11T Semiconductors
GOOGL Alphabet Inc $2.21T Internet Content & Information
AMZN Amazon Com Inc $1.95T Internet Retail
META Meta Platforms Inc $1.26T Internet Content & Information
BRK.B Berkshire Hathaway Inc $883.7B Insurance - Diversified

Why is market capitalization important

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.

Related terms