What is market cap, in simple terms?
The total value of all a company’s shares: share price times number of shares. It is the real measure of a company’s size; the share price alone tells you nothing.
Market cap, short for market capitalisation, is what the whole company is worth on the stock market right now. Multiply the share price by the number of shares outstanding. A company with 1 billion shares at $50 has a market cap of $50 billion.
It is the number to use for size, and the share price is not. A $30 stock is not "cheaper" than a $300 stock in any meaningful sense; the $30 company might have ten times as many shares and be worth far more. Comparing share prices between companies is one of the most common beginner mistakes, and market cap is the fix.
The categories you will see in news: mega-cap for the trillion-dollar giants, large-cap above roughly $10 billion, mid-cap between $2 and $10 billion, small-cap below that. Index funds and news coverage use these buckets constantly, and "small caps rallied today" means the small-company group did well.
Market cap also drives index weighting. The S&P 500 gives each company weight in proportion to its market cap, which is why a handful of enormous technology companies account for a large slice of the index.
Informational only, not financial advice. Updated September 4, 2026.
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