Market capitalization typically reflects the level of development of a company. Large-cap stock investments are typically seen as more cautious than small- or mid-cap stock investments, presumably providing less risk in exchange for a less aggressive growth potential. Midcap equities, on the other hand, typically sit on the risk/return spectrum between large companies and small caps. It's possible that midcap companies are working to boost their overall competitiveness and market share. It's possible that this phase of development will determine if a company ever realizes its full potential. On the risk/return continuum, midcap stocks often sit between large companies and small caps. Midcaps might have greater room for expansion. Midcaps may therefore have greater growth potential than large caps. Small-cap firms may have more volatile stock prices due to business or economic downturns because of their relatively limited resources.