Note: This article discusses some stocks with market caps below $2 billion. Such small-cap stocks tend to be volatile.
Shares of Super Micro Computer (SMCI) have yet to recover after a profit warning caused it to drop 20% in April. Chris Retzler, portfolio manager for the Needham Small Cap Growth Fund (NESGX - Get Report) , said the server solutions provider should see some momentum later this summer once Intel (INTC - Get Report) rolls out its new chip.
"We expect to see an increase in their sales, and really they are a capex to the buildout of the cloud and the Internet 2.0," said Retzler. "We think they are in good shape for the next year or so."
The Needham Small Cap Growth Fund is up 9.7% thus far in 2016, according to Morningstar. The $26 million fund has returned an average of 5.6% annually over the past three years, putting it in the 75th percentile of Morningstar's small-cap growth category.
Retzler is also bullish on Ultra Clean Holdings (UCTT - Get Report) , which is up 12% year to date. The semiconductor equipment maker will benefit from its appearance at the Semicon West trade show in July, Retzler commented.
"We feel that it is pretty well poised for the second half as Intel deploys capital to compete with Taiwan Semiconductor (TSM - Get Report) , and Ultra Clean is a supplier to most of the major players," said Retzler.
"They have been rolling out a new product line, which really helps improve yield of chips," said Retzler.
Finally, Retzler is a fan of Omnicell (OMCL - Get Report) , which is up 7% thus far in 2016. The drug delivery company has new products that should get traction in hospitals in the second half, Retzler said.
"It's a great management team that's been there a long time and has significant inside ownership," said Retzler. "We think that their second half is looking pretty good right now."