Market capitalization, often called market cap, is a way to measure the size of a company in the stock market. It is calculated by multiplying share price by the total number of outstanding shares.
investing guide for DraftKings example:
- Apple in the technology sector has a very large market cap, making it one of the biggest companies in the world.
- JPMorgan Chase from the financial sector also has a huge market cap, but lower than the tech giants.
- ExxonMobil in energy shows how oil and gas firms rank by value.
- McDonalds in consumer services has a smaller market cap but still attracts global investors.
Types of market cap:
- Large-cap (stable firms like Apple, Microsoft, JPMorgan).
- Mid-cap (growing companies like Shopify, Square, or Moderna).
- Small-cap (emerging firms often in biotech, clean energy, or startups).
Understanding market cap helps investors assess risk across different industries.
