Small-cap

A small-cap stock is a company with a market capitalization (total value of all its shares) between roughly $300 million and $2 billion. You'll see this term when screening stocks or reading research reports—it's a way to categorize companies by size. Small-caps matter because they're often younger, faster-growing businesses than large companies, but they're also riskier and less liquid (harder to buy or sell quickly). For example, a regional software company worth $800 million would be considered small-cap, whereas Apple or Microsoft are mega-cap. Small-caps can offer bigger upside potential, but they require more homework and stomach for volatility.