The Small Caps in Large Letters: Shakeup in the Financial Markets. By Gene W. Edwards. Posted 7/20/2024.

The “market cap” of a company is the value of that company’s total stock. If one share of it (its stock) is presently $10 and 1,000,000 share are owned, the stock value of that company is $10,000,000. And going up! Because . . .

Since July 11, when Nvidia did a 10:1 stock split, the financial markets have drifted away from the giant seven companies, led by Nvidia, Microsoft, and Apple. Nvidia, the A.I. giant, led the whole market . . . and then, suddenly, it didn’t! Those three companies are each still worth three trillion dollars ($3,000,000,000,000) or a little more.

Nvidia stock was worth $1,200 until July 11 when you suddenly instead owned 10 shares worth $120 each (stock split), thereby making one share more affordable. Soon one share’s value rose to $141. Then its value descended to $117 per share, not once but twice, as investors fled to small A.I. companies on the growing edge, small-cap (market cap) companies.

Investors were seeking the next Nvidia, the company whose stock just rose 800% in just 18 months. Investors/speculators were looking to get in on the ground floor of the next Apple or Microsoft. Nvidia’s original stock was worth $11. Had you bought one share then, AND HELD IT, you’d be rich today, given stock splits and all. Example: if Nvidia is worth 3MMMM$ and one share is worth $120, 120 into 3,000,000,000,000 is 25,000,000,000, 25 billion shares now! That’s 75…