What is market capitalization and what are the main companies?

The market capitalization it is one of the best indicators of the size of a company. Represents the total market value of a company’s outstanding shares. In this article we will talk about its importance and about the main international companies in terms of market capitalization.

Calculating the market capitalization of a company is not difficult, just take the total number of outstanding shares of the company in question and multiply that figure by the share price. For example, if a company has 4 million shares outstanding and each share has a value of 40 euros, then its market capitalization is 160 million euros.

Gold, silver and bronze on the international market capitalization podium

Now that you know what market capitalization consists of, let’s do a little review of the podium that crowns the list of the 10 largest companies in the world: Manzana, Microsoft Y Amazon, in that order. What do these companies that lead the ranking by market capitalization have in common? Its membership in the thriving and ubiquitous technology sector.

Apple, $ 881.98 billion

The apple company leads the world list of companies by market capitalization. The large profit margin it has on its entire product range is behind the company’s success on the stock market (for example, it makes about $ 500 for every iPhone it sells). Apple can afford this pricing policy because it has managed to consolidate its brand image as synonymous with sophistication and exclusivity.

Microsoft, $ 803.09 billion

Very close to Apple is Microsoft, which has to settle for the silver medal. Now, he disputes closely the reign of Apple in terms of market capitalization is concerned. Behind its good numbers is the firm commitment of the Redmond company to cloud computing, with initiatives such as Microsoft Azure, or with its professional tablets from the Surface range. In addition, the company founded by Bill gates it remains the undisputed queen of the lucrative market for computer operating systems.

Amazon, $ 739.460 million

The bronze for this podium goes to Amazon, the online commerce giant led by Jeff Bezos. The growth of the company is truly extraordinary, with total sales in mid-2019 of more than $ 500 billion. What was in its beginnings a humble online bookstore has today become the portal where we can buy from the most elaborate books to the most original accessories. And all this with a logistics service that is a real headache for its direct competitors due to its speed and efficiency.

In summary, now that you know what the market capitalization of a company is and that you already know the main companies classified according to this powerful indicator, you only have to use it to make your investments. A little advice before finishing: the higher the market capitalization of a company, the lower the potential for growth and the lower risk for your investment capital and vice versa. Take this into account if you are going to invest taking the market capitalization of a company as a reference.

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