Special to the Financial Independence Hub
The small-cap technology stock sector is fascinating in that it’s comprised of companies that have the potential to grow fast. Small caps are considered riskier than large- or mid-caps, and this means they have a higher potential for making huge profits for investors.
However, this is not to say that you should invest in small-cap tech stocks blindly. With a little due diligence, you can accurately determine the winning companies that can overcome the risks to move higher and give you lucrative returns. Here are some of the top small-cap stocks that are already excelling in the stock market, and which you might consider for investment.
Oclaro Inc. (OCLR, Nasdaq)
Oclaro Inc. is an optical networking company that’s a serious player in optical networking for high-speed global networks. The company offers transmission products and modules to telecom firms, enterprise networks, and data centers. While OCLR is a small-cap company, it is in competition with some of the biggest players in networking, such as Cisco Systems. However, OCLR focuses on core markets and high-speed components, and this has given it the cutting edge in the industry.
The company has shown great potential for growth, especially after establishing a solid position in China. OCLR aims at modernizing and upgrading its computing and telecom speeds, an indication of impending growth for the company. This great potential makes it an ideal company to invest in as its stocks are bound to generate even better returns in the years to come.
Celestica Inc. (CLS, NYSE)
Celestica Inc. is a popular company in the electronic manufacturing services (EMS) industry. Based in Canada, it provides a broad range of products such as wireless networking, telecommunication equipment, smartphones, storage devices, and printer supplies to original equipment manufacturers. The company has consolidated its services, allowing clients to purchase various products from them. This gives Celestica the upper hand in the industry in case of instances of market contraction in the EMS industry.
In the past few years, Celestica has begun to focus more on becoming a niche market provider rather than on the consumer market. This is because a significant proportion of its revenue comes from industrial companies. Management projects that the net profit margin will continue to grow from the current 2.18 per cent, making the company an excellent choice for some investors.
Zillow Group (Z, Nasdaq)
Zillow Group is a small-cap company that operates one of the largest a real estate informational websites and a mobile phone application. The company focuses on housing-related services such as renting, purchasing, financing, obtaining a home warranty, and home improvement. It offers consumers information about homes and connects them with local professionals such as real estate agents, lenders, and rental professionals.
In 2015, Zillow Group merged with another company known as Trulia to create a powerful force in the real estate advertising industry. This merger has boosted the company’s audience, allowing its revenue to grow to a range of $1.05 billion to $1.07 billion in 2017.
Advanced Micro Devices Inc. (AMD, Nasdaq)
Advanced Micro Devices Inc, commonly known as its ticker symbol AMD, is a leading supplier of microprocessors and graphic semiconductors. Some of its products include central processing units (CPUs) that are tailored for use in personal computers, servers, and gaming consoles. The company shifted its market strategy from being an integrated device manufacturer to one that designs and sells devices. It has also diversified its applications by adopting technology for use in industrial controls, set-top boxes, and game consoles.
AMD is currently considered a fabless company after it spun off its manufacturing division, a move that facilitated financial freedom while cutting down manufacturing costs. Its business model has seen its stocks rise significantly over the past few years.
Are you an investor looking for suitable small-cap stocks to generate impressive returns? If so, these are some of the top tech companies you may want to consider investing in, as they have shown great potential for growth over the past few years.
Sia Hasan is a tech entrepreneur by day, and a freelance writer by night. Her passion lies in business technology, efficient and sleek programming, and customer relationship management. When she doesn’t have her nose pressed against her computer screen, you can find her spending time with the loves of her life, her two dogs, Pixel and Vector.