The technology sector has been attracting significant investor attention owing to an increasing reliance on technology solutions. Furthermore, the Federal Reserve's reaffirmation that interest rates will remain unchanged in the near term has created a positive outlook for small-cap tech companies such as Impinj (PI) and ZIX Corporation (ZIXI). So, Wall Street analysts are bullish about these two stocks and expect them to rally by more than 50% in the coming months. Let’s discuss.As people and businesses grow more reliant on technology, tech companies are widening their bases and expanding their offerings to capitalize on the growing demand. Furthermore, with widespread digitalization across nearly every industry, and the increasing deployment of the 5G networks, investors are becoming evermore bullish about the industry. This is evidenced by the iShares U.S. Technology ETF’s (IYW) 20.5% return over the past six months.
Because the Fed has declared that it will keep benchmark interest rates near zero for now, with no plans to raise them in the soon, small-cap companies have much scope to grow by taking advantage of the ‘cheap money’ environment. In fact, with mega-cap tech shares experiencing a sell-off on investors’ expectations of a market correction due to the COVID-19 resurgence, small-cap tech stocks could be safer bets now.
As such, Wall Street Analysts expect fundamentally sound small-cap technology stocks Impinj Inc. (PI) and Zix Corporation (NASDAQ:ZIXI) to rally by more than 50% over the next 12 months.