What type of stocks typically have a market value of less than $1 billion?

Small cap stocks are defined as shares of companies that typically have a market capitalization of less than $1 billion. Market capitalization is calculated by multiplying the stock price by the total number of outstanding shares. These stocks are often associated with smaller, younger companies that may have high growth potential but also come with greater risk compared to larger companies. Investors often perceive small cap stocks as having the potential for substantial growth, which can lead to significant returns on investment.

Large cap stocks represent companies with market capitalizations of $10 billion or more, while mid cap stocks have values that typically range from $1 billion to $10 billion. Growth stocks, on the other hand, are characterized by their potential for above-average growth and are not specifically tied to market capitalization categories. Thus, small cap stocks are the correct choice when identifying those typically valued at less than $1 billion.