What has been very encouraging over the last two earnings seasons is the strength we’re getting in small-cap technology companies (stock market action aside). A lot of smaller technology companies are reporting a significant improvement in revenues, and that means that consumers are opening up their wallets, if only just a little.

I’m not a fan of large-cap, retail technology stocks as stock market investments. Sure, Apple Inc. (NASDAQ/AAPL) is a great company, and I like their computers, but the company just priced itself out of its own market. Apple is now struggling to grow. Dell Inc. (NASDAQ/DELL) did the same thing. It priced itself out of its own market (the other way around); and while it once was a great investment on the stock market, it’s been terrible for the last dozen years.

What we’re getting now are countless smaller names in enterprise technology saying that their revenues are growing, which is more important than earnings growth. This is exactly what the economy needs. Big-cap companies will continue to have to deal with weakness from global operations; but domestic small-cap tech stocks are like a breath of fresh air, and the stock market is beginning to notice.

Take a look at Qlik Technologies Inc. (NASDAQ/QLIK). This is the second growing company I recently found out of Radnor, PA. (See “Great Old Economy Business That Isn’t Full of Hot Air.”) Qlik makes business intelligence software, which is used by corporate and government customers to share data. This is a growing company, but the position slowed on the stock market last spring, after a very strong start in 2010. Qlik’s stock market chart is below:

Stock chart courtesy of www.StockCharts.com

I think this small, but growing enterprise tech company has a lot of potential going forward. Its fourth-quarter revenues grew 27% to $137.5 million. In today’s economy, that’s solid. Earnings fell a little bit to $13.3 million, down from earnings of $15.6 million in the comparable fourth quarter, but that doesn’t bother me. In this stock market, we need to see top-line growth, and all of Qlik’s metrics, including license, maintenance, and services revenues, produced.

The company beat the Street with its 2012 fourth-quarter revenues and earnings. It guided first-quarter earnings slightly below consensus, but upped its total 2013 revenues outlook above current expectations.

I haven’t conducted a scientific study on the data yet, but my read is that business conditions are improving quite well for smaller, domestic technology companies.

The stock market is still in a bit of a daze right now after such a strong January. The collective uncertainty is very apparent in the trading action, and earnings are still coming in. Where the stock market goes is up to the Dow Jones Transportation Index, but I suspect we’ll get a little more upside followed by a retreat.

So, to sum up: revenues in small-cap, enterprise tech companies are improving. Earnings, or a lack thereof, aren’t as important in this kind of market. The strength started in the third quarter of 2012 should have staying power. It’s a good sign for the U.S. economy and employment in the field of information technology (IT). I like what Qlik is accomplishing.

About Michael Lombardi (http://www.profitconfidential.com) Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.