NEW YORK (CNN/Money) - Watching the Nasdaq these days is a bit like watching the severely mismatched boxing bout between the formidable Tonya Harding and unsteady underdog Paula Jones. Jones, you may recall, lasted three rounds in the recent Fox extravaganza.

We can only hope the Nasdaq proves a little more resilient.

Each new day seems to bring a new burst of bad news for the perpetually pummeled tech sector. Disappointing earnings reports and guidance from the likes of IBM and Microsoft suggest that not even tech heavyweights have managed to escape the tech spending drought.

And then of course, there's telecom. (A moment of silence, please.)

For many tech investors, only the promise of a second-half recovery in tech spending has managed to prevent them from giving in wholly to despair.

Trouble is, there was never any real evidence to support the second-half recovery. Now, as the second half draws ever nearer, it seems clearer than ever that there's not much there there.

Consider what CEOs and CFOs have been saying. Last month, Oracle CFO Jeff Henley noted that "while the overall economy may have begun its recovery, tech spending is lagging."

At a recent analyst meeting, Dell execs said they thought the recovery would take six quarters.

On his company's earnings call last week, Intel CFO Andy Bryant was blunt. "What we're seeing right now is seasonality. We are not seeing any kind of recovery yet."

Pat Russo, CEO of Lucent, recently told the New York Times that she thought she saw "light at the end of the tunnel -- it's just not clear how long the tunnel is."

That's really about the best you can say at this point.

Does it really matter just when the tech recovery kicks in? If you're a long-term investor who has gotten into a tech stock with decent prospects at a decent price, not really. The problem is that it's awfully hard to find a tech stock cheap enough to give long-term investors much of a margin of safety -- or indeed one at all.

Consider semiconductors, a relative bright spot in all the gloom. After a brutal decline last year of more than 30 percent, chip and chip-equipment makers are starting to see signs of growth. But investors have been anticipating the chip uptick for so long that valuations in the sector are already looking more than a little stretched.

PC chip warhorse Intel has a P/E of more than 40 (based on estimates for this year). That's twice the P/E of the S&P 500. Applied Materials has a P/E of 185 (though, to be fair, analysts do expect the E part of the equation to rebound in a big way in 2003, bringing the 2003 P/E down to a "mere" 39).

Communications chipmakers, meanwhile, have spiraled off into a universe of their own. Broadcom and PMC Sierra, neither of which is expected to post a profit this year, trade for more than 100 times estimated 2003 earnings.

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Chip stocks aren't the only tech names sporting seemingly unsupportable valuations. Those with fond memories of the bubble years will be pleased to know that Yahoo!, despite a recent selloff, trades for roughly 140 times forward earnings. Compared to that, even good old Cisco, at 43 times (July) 2002 earnings looks cheap, Qualcomm (at 35 times forward earnings) looks like a steal, and Microsoft at 29 times (June) 2002 earnings looks like the bargain of a lifetime.

More traditional value hounds might look askance at "bargains" like that, given the dimming growth prospects of the tech's biggest names. But if you're determined to invest in big cap tech, I suppose you have to take what you can get.

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