Tech investors should start thinking small

  • Small-cap tech stocks could shine in 2024
  • Tech investors should start thinking small
  • The Nasdaq Composite has rallied 37% this year, while the small-cap Russell 2000 index is up 4%
  • Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, recommends getting bullish on small-caps
  • RBC has a list of small-cap tech picks with market values between $1 billion and $8 billion
  • Hedge fund sources suggest tech microcaps like Weave Communications and SoundThinking
  • Impinj, a small-cap tech company that makes RFID tags, is also a favorite pick
  • Chicken Soup for the Soul Entertainment has seen a significant decline in stock performance

The Nasdaq Composite has rallied 37% this year, while the small-cap Russell 2000 index is up 4%. However, it’s time for tech investors to start thinking small. The best tech strategy in 2023 was to buy the market’s largest companies, but now it’s time to focus on small-cap stocks. Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, recommends getting bullish on small-caps as the relative price/earnings ratio of the Russell 2000 compared with the S&P 500 has reached the lowest level since the dot-com era. RBC has a list of small-cap tech picks with market values between $1 billion and $8 billion. Hedge fund sources suggest tech microcaps like Weave Communications and SoundThinking. Another favorite pick is Impinj, a small-cap tech company that makes RFID tags. However, Chicken Soup for the Soul Entertainment has seen a significant decline in stock performance.

Factuality Level: 7
Factuality Justification: The article provides information about the performance of the Nasdaq Composite and the small-cap Russell 2000 index. It also includes quotes from a hedge fund manager and a strategist, as well as investment ideas from RBC Capital Markets. The article mentions the relative price/earnings ratio of the Russell 2000 compared to the S&P 500 and the potential impact of Fed rate cuts on smaller companies. It also includes recommendations from hedge fund sources. However, the article does not provide any sources or evidence to support the claims made by the hedge fund manager and the strategist, and it does not provide a balanced view by including alternative perspectives or potential risks. Overall, the article contains some relevant information but lacks in-depth analysis and supporting evidence.
Noise Level: 4
Noise Justification: The article provides some relevant information about the performance of tech stocks and the potential for small-cap stocks to rebound. However, it also includes some irrelevant information about specific stock picks and a personal anecdote about a failed investment. The article lacks scientific rigor and intellectual honesty as it relies on individual opinions and does not provide evidence or data to support its claims.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of tech stocks and the potential for small-cap stocks to rebound. It mentions specific companies like Apple, Microsoft, Alphabet, Amazon.com, Nvidia, Meta Platforms, Tesla, Impinj, Clearwater Analytics, Coursera, Guidewire Software, Magnite, DoubleVerify Holdings, Varonis Systems, PowerSchool Holdings, Flywire, Shift4Payments, and Lightspeed Commerce.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article primarily focuses on the performance of tech stocks and the potential for small-cap stocks to rebound. It does not mention any extreme events or their impact.
Public Companies: Impinj (Unknown), Apple (Unknown), Microsoft (Unknown), Alphabet (Unknown), Amazon.com (Unknown), Nvidia (Unknown), Meta Platforms (Unknown), Tesla (Unknown), Clearwater Analytics (Unknown), Coursera (Unknown), Guidewire Software (Unknown), Magnite (Unknown), DoubleVerify Holdings (Unknown), Varonis Systems (Unknown), PowerSchool Holdings (Unknown), Flywire (Unknown), Shift4Payments (Unknown), Lightspeed Commerce (Unknown), Weave Communications (Unknown), SoundThinking (Unknown), Impinj (Unknown), Chicken Soup for the Soul Entertainment (Unknown)
Key People: Lori Calvasina (Head of U.S. equity strategy at RBC Capital Markets), Rishi Jaluria (RBC enterprise software analyst), Matthew Swanson (Internet analyst), Matthew Hedberg (Tech infrastructure analyst at RBC), Daniel Perlin (Fintech analyst at RBC), Jeff Meyers (Hedge fund manager at Cobia Capital), Dan Niles (Hedge fund manager at Satori Fund)

Reported publicly: www.marketwatch.com