A mid-cap stock refers to a publicly traded company with a market capitalization generally between $2 billion and $10 billion. Market capitalization, or market cap, is calculated by multiplying a company’s current stock price by its total number of outstanding shares. This classification sits between small-cap (typically under $2 billion) and large-cap stocks (typically above $10 billion).

Mid-cap companies are often seen as being in a transitional phase of growth. They have usually moved beyond the high-risk stage of small-cap businesses but are not yet as established as large-cap firms. This makes them attractive to investors seeking a balance between growth potential and relative stability.

These companies are typically characterized by moderate growth opportunities, expanding market share, and a stronger track record than small caps. They often belong to industries such as technology, healthcare, manufacturing, or retail. Mid-caps are particularly appealing during economic expansion, as they are nimble enough to adapt and grow but stable enough to weather moderate market fluctuations.

While mid-cap stocks can offer a blend of growth and safety, they are not risk-free. They may experience higher volatility compared to large caps but are generally less risky than small-cap stocks. Investors often include mid-caps to diversify portfolios and enhance long-term returns.