Ever since the market recuperated March 11, the average technology stock fund has risen 36% and the Nasdaq Composite Index has gained 32%, The Wall Street Journal reports. Surprisingly, Internet stocks are once again hot.

That has caused some funds, including the Jacob Internet Fund, to make surprising gains. After losing 79% in 2000, 56% in 2001 and 13% last year, the fund has gained 49% over the past three months. But that doesn’t mean that the heady days of tremendous technology stock gains are back, analysts warn. People throwing caution to the wind may fall victim to the burst that occurred with the end of the first tech bubble, they say.

"I worry that people will read too much into this rally and think the good-old days are back," Chris Traulsen, an analyst with Morningstar, told The Journal.
What sparked the rally was when many technology firms met or beat Wall Street estimates. But the better-than-expected performance was mostly due to cost cutting, rather than increased demand, according to The Journal.

Even some technology fund managers warn against becoming overly optimistic. Robert Gensler, manager of the T. Rowe Price Global Technology Fund, said he did not expect corporate technology investments to match those of the 1990s. As a result, he has been moving holdings out of smaller-cap technology names into established players like Microsoft and Cisco.

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