Market capitalization is an important yardstick used to pick and choose the right stocks among thousands of listed companies. The total value of a publicly traded company’s shares is called market capitalization. Market capitalization, short for ‘market cap’, is a term investors use to show how much a company is worth.
A company’s market capitalization is determined by dividing the number of shares of all shares in circulation by the current share price. A company’s market capitalization, for example, would be $100 million ($100 multiplied by 1,000,000 shares) if it issued one million shares of stock trading at $100. Market capitalization, often known as capitalization, refers to the valuation of a company on the stock market
But what do these numbers say? They help to categorize them into different groups. According to their size, companies are usually divided into one of three main groups: large-cap, mid-cap and small-cap.
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Large Cap: Market value of $10 billion or more; typically established, mature companies with solid reputations.
Midcap: Companies with a market value between USD 3 billion and USD 10 billion; these are often well-established companies operating in rapidly expanding markets.
Small Cap: $3 billion or less in market value; usually young companies dealing with specific emerging markets or industries.
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Investments in large-cap stocks are typically considered more cautious than investments in small- or mid-cap stocks, possibly offering less risk in exchange for less aggressive growth potential. Large-cap companies often have more stable and mature operations because they have strengthened over time and weathered difficult business circumstances.
Large organizations, however, may have limited growth potential because they have already used their best opportunities to expand to their current size.
Here are the top 10 companies with the largest market capitalization
- Apple (AAPL) 2,351 thousand dollars
- Microsoft (MSFT) 1,901 thousand dollars
- Alphabet (GOOG) 1,303 Millennial Dollars
- Amazon ( AMZN ) $960.28 billion
- Berkshire Hathaway (BRK-A) USD 696.55 billion
- Tesla ( TSLA ) $606.20 billion
- UnitedHealth ( UNH ) $500.96 billion
- Johnson & Johnson (JNJ) 467.67B
- Visa (V) 460.99 B
- Exxon Mobil (XOM) USD 452.43 billion