What is the market cap range for mid cap stocks?

Mid-cap stocks are typically defined as companies with a market capitalization ranging between approximately $2 billion and $25 billion. This classification allows investors to identify companies that are larger than small-cap stocks but smaller than large-cap stocks, which often exhibit different growth potentials and risk profiles.

The rationale for this range is supported by common financial definitions and investment strategies, where mid-cap stocks are often seen as having a balance between growth and stability. Companies within this range are generally considered to have more established business models than smaller firms, while still possessing significant opportunities for growth, characteristic of companies not yet reaching the large-cap status.

Understanding market capitalization is crucial for investors as it influences investment strategies, portfolio diversification, and risk management. Mid-cap stocks are often favored for their potential to outperform larger companies in certain market conditions while still retaining less volatility than small-cap stocks.