Market capitalization, commonly referred to as "market cap," is a key metric used to measure the value of a publicly traded company. It is calculated by multiplying the total number of outstanding shares by the current market price per share. Market cap provides investors with an indication of a company's size and value in the stock market. Large-cap companies typically have market capitalizations in the billions, while mid-cap companies range from a few hundred million to a billion, and small-cap companies generally have market capitalizations below a billion.

Investors and analysts use market capitalization to gauge the risk and potential return of a particular investment. It helps in categorizing stocks and building diversified investment portfolios. Market cap is also instrumental in determining a stock's weight in various market indices, such as the S&P 500 or the Russell 2000. While market cap is a valuable tool, it's important for investors to assess other factors, such as a company’s fundamentals, industry trends, and growth prospects, to make informed investment decisions. Ultimately, market capitalization plays a crucial role in understanding the relative size and potential of publicly traded companies in the financial markets.