How do you calculate market cap?

Multiply the current share price by the shares outstanding: every share the company has issued and not bought back, including those held by insiders. The drawing at the top of the page shows it as an area: the price is the height, the share count is the width, and market cap is the space inside.

Hypothetical: Company X has 200 million shares outstanding and trades at $50. Its market cap is $50 × 200,000,000 = $10 billion. If the price rises 10% to $55, market cap rises to $11 billion, although nothing about the business had to change.

Quote pages show market cap live, because it moves every time the price does. Small differences between websites are normal: they may update the share count at different times, and companies with several share classes, such as Alphabet (GOOGL and GOOG), are sometimes shown for one class only.

Market capitalization (market cap)
Share price × shares outstanding: the market value of all of a company’s shares.
Shares outstanding
All the shares a company has issued and not repurchased, including those held by insiders. Found in quarterly and annual reports.

Why a higher share price does not mean a bigger company

The share price alone says nothing about size, because the number of shares can be anything. In the drawing below, Company A trades at $300 with 20 million shares: a market cap of $6 billion. Company B trades at $50 with 240 million shares: $12 billion. B’s shares cost a sixth as much, yet B is twice as large.

In the same way, a $5 stock is not cheap and a $500 stock is not expensive just because of the number. What matters is what you get per share, which ratios such as the P/E ratio and earnings per share measure. A stock split changes the share price without changing market cap at all.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn shapes built from equal squares worth $1B each: Company A is a tall, narrow column ($300 × 20M = $6B, six squares) and Company B a long, flat strip ($50 × 240M = $12B, twelve squares), with the note: a higher share price is not a bigger company; height is price, width is shares.

Large-cap, mid-cap and small-cap: what are the ranges?

Investors sort companies into size tiers by market cap. There is no official cutoff: index providers, fund companies and data sites each draw their own lines, and some move them as markets grow. The rough ranges in the list below are commonly used, but treat them as approximate.

Size tends to change how a stock behaves. Larger companies are usually more established, followed by more analysts and easier to trade. Smaller companies can grow faster, but their shares tend to swing more, can have wider bid-ask spreads and are often hit harder when the market turns. Many funds are built along these lines, such as large-cap or small-cap index ETFs; see what is an ETF.

  • Mega-cap: about $200 billion and above.
  • Large-cap: about $10 billion to $200 billion.
  • Mid-cap: about $2 billion to $10 billion.
  • Small-cap: about $300 million to $2 billion.
  • Micro-cap: below about $300 million.

Turn your phone sideways to read the drawing. Tap to close.

Five hand-drawn circles growing from left to right: micro (under $300M), small ($300M–2B), mid ($2B–10B), large ($10B–200B) and mega ($200B+), with the note that these are rough ranges that vary by provider, and an arrow from usually swing more to usually more established.

Float vs shares outstanding

Shares outstanding counts every share in shareholders’ hands. The float, or free float, counts only the shares the public can actually trade. It leaves out shares held by founders, executives, governments or other controlling holders, and shares that cannot be sold yet, for example during the lock-up period after an IPO.

Hypothetical: Company Y has 500 million shares outstanding, but its founders hold 200 million and rarely sell, so its float is 300 million shares. At $20 a share, its market cap is $10 billion and its float-adjusted market cap is $6 billion.

Float matters in two ways. With a small float, fewer shares change hands, so the price can jump on modest buying or selling. And major indexes, including the S&P 500, weight companies by float-adjusted market cap, so a company with a big insider stake counts for less in an index fund than its full market cap suggests.

Float (free float)
The shares available for public trading: shares outstanding minus those held by insiders, controlling holders or under lock-up.
Float-adjusted market cap
Share price × float. The measure most major index providers use to weight companies.

Market cap vs enterprise value

Market cap prices the shares only. Enterprise value (EV) estimates the price of the whole business: market cap plus debt, minus cash. Someone buying the entire company would take on its debt but also get its cash. Hypothetical: a $10 billion market cap with $3 billion of debt and $1 billion of cash gives an EV of $12 billion.

Two companies with the same market cap can carry very different debt, which is why ratios such as EV/EBITDA use enterprise value. Our guide to valuation ratios covers them.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn waterfall: a green $10B market-cap bar, a red +$3B debt bar stacked above it, a blue −$1B cash bar coming off, and a green $12B enterprise-value bar, with the note: EV is roughly the price of the whole business.

How to use market cap, and its limits

Market cap is a quick way to compare size, see how much of an index a company makes up, and match risk to your plan: a portfolio of micro-caps behaves very differently from one of large-caps. Screeners let you filter by it; see the TradingView stock screener.

It is not a measure of value. A big market cap can reflect a rich valuation as easily as a big business, and it swings with the price every day. Compare it with what the company earns and owes before drawing conclusions; fundamental analysis for beginners is the next step.