What Is Market Cap? The Definition Every Investor Needs Before Picking Their First Stock
If you’re analyzing a stock, one of the first metrics that comes up is market cap. That’s short for market capitalization, and it’s the total value of all of a company’s shares outstanding. Here’s how it’s calculated and why it’s important.
When you hear about the largest companies in the world, it often refers to the most valuable companies in the world, and these phrases are often interchangeable. They both refer to the size of the company’s market cap. Nvidia (NASDAQ: NVDA), for example, is the largest company in the world with a market cap of about $5.5 trillion.
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