Market capitalization

Market cap is the clearest single expression of a company's equity value as priced by the market. It's the number you'd pay if you wanted to buy every share — ignoring, for the moment, that actually trying would move the price. A company with 500 million shares trading at $80 has a $40 billion market cap.

Size bands are a standard way to group companies. Rough conventions: large-cap is roughly $10B+, mid-cap is $2B-$10B, small-cap is $300M-$2B, micro-cap is below $300M. Thresholds vary between index providers, and they drift upward over time with the market.

Size correlates with several properties that matter for portfolio construction: larger companies tend to have more liquid shares, narrower bid-ask spreads, more analyst coverage, lower volatility, and lower expected returns on average. The "small-cap premium" — the finding that small-cap stocks have historically earned more than large-caps over very long horizons — is a factor-investing input, not a reason to chase individual small-caps.