A second problem is determining which IT stocks are actually going to make any money. "The problem with the market in IT stocks has been its predictability of earnings," comments John Pullar-Strecker, head of the global technology desk at Aberdeen Asset Management.
"If you have a slowdown in spending on software, because that spending has been deferred, then earnings are going to be very uneven."
But, he says, "the key to the IT sector is global development. You have to ask what does a UK company have to offer to the world, or is it just going to concentrate on the UK or Europe? If you are looking for global companies that are based in the UK, the obvious one is ARM Holdings. It produces specialist microprocessors for equipment that needs low power.
"The company has a global presence although that is already reflected in its share price. Its technology is not exactly unique, but competition is sufficiently small for it to hold a strong position, supplying to companies like Nokia and Ericsson. That is the kind of company that is going to be successful, providing it can manage its growth."
Investors who can choose, therefore, tend to concentrate on smaller, growth stocks. "The ones that are particularly like that in my portfolio at the moment are Royalblue and DCS Group," says Nigel Thomas, manager of ABN Amro's UK Growth Fund. "Royalblue is definitely my best pick. It is in helpdesk and financial software and growing at 30 per cent per annum. Its p/e is up there with the rest of the sector, but it is not exorbitant and it has just had some excellent figures."
Thomas argues that Royalblue has the sort of attractive market niche that investors should be looking for.
"Bill Gates is on record as saying that the helpdesk software market will show annual growth at 25 to 30 per cent for the next five years, and Royalblue is a major player in that market," he says.
"This is software that can handle inquiries and link that to a client company's systems. There is a general convergence of software and systems on a global scale so helpdesks can be based in Dublin or Bangalore or wherever."
Nigel Thomas's other current star has a more specific focus. "DCS is more involved with software for financial dealers. It meets my criteria of looking for good companies that are not on excessive ratings. It is also important that these are not `blue sky' companies - you are looking at actual businesses," he says.
But what if you want to take a punt on some of Thomas's `blue sky' companies? "JSB Software Technologies is an AIM stock that provides access control software, for example, to dealing services to prevent dealers doing their own thing and it is actually making profits from a former business." Thomas says.
"I think the best Internet service provider is Easynet [also AIM listed], which is a UK business but is also in Germany and other parts of Europe.
"Its strength is that it is attacking the corporate market, signing up a client and helping them develop their website and then developing other services from there."