Market cap = Share Price × Total Shares Outstanding. If a company has 1 billion shares trading at $150 each, its market cap is $150 billion. It tells you how much the entire company is worth according to the stock market — the collective opinion of millions of investors.
Size categories: mega-cap ($200B+) — Apple, Microsoft, Aramco; large-cap ($10-200B) — stable blue-chips; mid-cap ($2-10B) — growth potential with moderate risk; small-cap ($300M-2B) — higher growth but more volatile. Apple became the first company to reach $3 trillion market cap in 2023.
Market cap does not equal company value. Enterprise Value (EV) = Market Cap + Debt − Cash is a more complete measure. A company with $100B market cap and $50B in debt is really a $150B purchase for an acquirer. India's total stock market capitalization crossed $5 trillion in 2024, making it the world's fourth-largest equity market.