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What does it mean for a company to have its market cap larger than the market size?
The quickest way to approach this question is to first understand that it compares flows vs. levels. Market size is usually stated as an annual or other period figure, e.g. "The market size of refrigerators will be $10mn in 2019."  This is a flow figure. Market capitalization is a level figure at any given point in time, e.g. "The market cap of the company was $20 million at the end of its last fiscal quarter." Confusion sometimes occurs when levels and flows are used loosely for comparisons.  It is common for media to make statements such as "Joe Billionaire is worth more than the GDP of Roselandia."  That is comparing a current level (net worth) with an annual flow (GDP). With this in mind, there are a variety of conditions where a company's equity market value will exceed its market size.  The most extreme example is an innovating, development-stage enterprise, say, a biotech company, developing a new market for a new product; the current market size may be nil while the enterprise is worth something greater. The primary reason however for situations where a company's equity market cap is greater than its market size is usually that the financial market expects the enterprise (and oftentimes its market, though this isn't necessary) to grow substantially over time and hence the discounted value of the company may be greater than the current or near future market size. A final example:  US annual GDP (which comprises of much more than corporate incomes and profits) for 2014 was about $17.4tn while the nation's total equity market value in 2014 was $25.1tn, both according to the World Bank.  That latter figure also doesn't include the trillions of corporate debts these companies have issued so the total market cap of US, Inc. is substantially greater than $25.1tn.