The demand for advanced technologies have increased exponentially over the past year given the rising demand across various sectors. Amid the fast-paced macroeconomic revival, small-cap tech stocks tend to outperform the markets by huge margins. Thus, investors with higher risk appetites should consider CTS (NYSE:CTS), Universal Electronics (NASDAQ:UEIC), Aviat Networks (NASDAQ:AVNW), and Franklin Wireless (FKWL) for their portfolios.The past year was no doubt one of the best years for tech stocks. This is apparent from the Technology Select Sector SPDR ETF’s (XLK) nearly 65% gain over this period. The tech sell-off triggered by rising treasury yields and sector rotation toward cyclical stocks have eased, as the Dow Jones and S&P 500 hit record highs recently. Tech stocks are making a massive comeback, as disappointing jobless claims data and concerns over a fourth wave of the pandemic have rejuvenated the interest in the pandemic beneficiaries.
The optimistic market recovery outlook has led investors to bet on small-cap stocks having the highest growth potential compared to mid-cap and large-cap stocks. This is reflected in the Russell 2000 Index’s more than 13% gain year-to-date, compared to S&P 500’s 9.1% return.
So, it is wise to bet on small-cap tech stocks such as CTS Corporation (CTS), Universal Electronics Inc. (UEIC), Aviat Networks, Inc. (AVNW), and Franklin Wireless Corp. (FKWL), as they have plenty of upside left.