Market Capitalization (Market Cap)

Market capitalization (or market cap) is the total dollar value of a company's stock. You calculate it by multiplying the stock price by the number of shares outstanding—basically, what the market thinks the entire company is worth right now. You'll see market cap used everywhere when comparing companies, because it tells you their size at a glance. A company worth $10 billion plays a different game than one worth $100 million. Market cap matters because larger companies tend to be more stable (though not always more profitable), while smaller ones can grow faster but carry more risk. For example, TechCorp might have a $50 billion market cap while StartupInc has just $500 million—that gap tells you a lot about their maturity and resources.