Mid-Cap Stock
A mid-cap stock is a share of a company with a medium-sized market capitalization, roughly between a couple of billion and around ten billion dollars.
Mid-cap stocks fall between large caps and small caps. The usual rule of thumb in the US places them between about $2 billion and $10 billion in market value, but index providers use their own, regularly updated ranges.
Mid-cap companies are often past the riskiest startup stage but still have room to grow. They may be expanding into new markets, adding products or gaining share in their industries. For this reason, some investors see mid caps as a middle ground: more growth potential than many large caps, with less risk than many small caps.
Mid caps can still be more volatile than large caps and may be hit harder in economic downturns. They also receive less analyst coverage, which means less information is readily available.
The S&P MidCap 400 is a common benchmark for this segment, and the Russell Midcap index is another.
Example: a company with 100 million shares trading at $50 has a market cap of $5 billion and would typically be classified as a mid cap. If the stock price doubles, it could move into large-cap territory.