Glossary
Large-cap stock
A stock of a company with a large market value, commonly defined as $10 billion or more.
A large-cap stock is the share of a company whose total market value is large, by a common rule of thumb $10 billion or more. Large caps include the household names that dominate the major indexes. They tend to be mature, widely followed, heavily traded and, on average, less volatile than smaller companies, which is why they make up the core of most index funds and diversified portfolios.
Where the line sits
There is no official cutoff, and the boundaries drift upward as markets grow. Brokers and fund companies often use $10 billion. Index providers draw their own lines. To be added to the S&P 500 a company needed an unadjusted market cap of at least $22.7 billion under guidelines effective July 1, 2025 (the range is reviewed periodically). The biggest names, worth hundreds of billions or trillions of dollars, are sometimes split off as mega-caps.
How large caps behave
Large-cap stocks generally have narrow bid-ask spreads and deep liquidity, so big orders move prices less. Many pay dividends and have long public histories. Growth is usually slower than at smaller companies, and returns by size have varied: in some decades small caps beat large caps, while US mega-caps led the market for much of the 2010s and 2020s. Because indexes like the S&P 500 are weighted by market value, the largest few companies can drive a big share of the index's return.