An edited excerpt from the June 20, 2003, edition of The Wall Street Journal

Technology shares have been rising in staccato leaps during the past three months. Since the run-up started March 11, the Nasdaq Composite Index has gained 32%, and the average tech-fund stock mutual fund is up 36% through Wednesday.

Internet company stocks and Internet-focused mutual funds have scored the sharpest gains. Shares of Jacob Internet Fund (JAMFX), for example, have soared 49% during the past 90 days through Wednesday, thanks in part to holdings like Chinese Internet portal Sohu.com Inc (SOHU), whose price has more than tripled during that span.

Sounds a bit like life before the tech bubble burst in March 2000, doesn’t it? That, some mutual fund watchers say, is just the problem.

Indeed, even with the Nasdaq closing at 1,648.64, it remains 67% off its 2000 peak. Despite the recent gains, Ryan Jacob’s Internet fund averaged a 41% loss for the three years ended Wednesday.

The rally began in March when many tech firms were able to meet or beat Wall Street’s muted expectations for the first quarter. In many cases, the achievement was due as much, or more, to cost cutting as to slightly improved customer demand. Many investment professionals are debating whether recent momentum has driven mercurial tech shares too high.

“The rally is far in excess of where it should be,” says Robert Gensler, manager of the $54.2 million T Rowe Price Global Technology Fund (PRGTX). “Fund managers don’t want to underperform or be left behind, so you see something of a seller’s strike.”

For investors tempted to leap on the tech bandwagon for fear of missing a rally, such comments should provide pause. Of course, for those who have held tech-heavy funds through more than three years of depressed values, the latest gains provide some reprieve. But the question of whether to take the plunge is difficult.

Before making a tech bet, investors first should consider how much technology exposure they have through other stock funds. During the bear market, some investors unwittingly made an outsize bet on the sector by adding technology funds to already tech-heavy growth funds in their portfolios. Tech stocks make up about 16% of the value of the Standard & Poor’s 500-stock index, but they make up 24% of the average large-cap growth fund, for example.