What exactly is market capitalization? Understand how much a company is worth in one article.

Want to know how much a company is worth now? Just look at the market capitalization.

How is market capitalization calculated? It's simple: circulating shares × current share price = market capitalization

For example, in August 2021, Uber had 1.88 billion shares outstanding, with a stock price of $39.25, so the market capitalization = 1.88 billion × $39.25 = 73.8 billion USD. Because based on the stock price, the market capitalization will fluctuate in real time.

Market Capitalization Classification Standards:

• Small market capitalization ($300 million - $2 billion): New companies or struggling enterprises, high risk but fast growth
• Market capitalization ($2 billion - $10 billion): Growth stage, with both foundation and potential.
• Market capitalization ($10 billion+): Mature companies with low volatility but stable returns.
• Super Market Capitalization ($20 billion+): tech giants like Apple and Amazon

Investment Perspective on Market Capitalization: Market capitalization can reflect the level of risk—large-cap stocks are less volatile and more stable, while small-cap stocks can experience dramatic rises and falls. Many indices and funds categorize stock selection based on market capitalization.

So looking at whether a stock is overvalued, market capitalization is a good starting point.