NEW YORK (CNN/Money) - Early Thursday morning, it looked like tech investors had dusted off copies of their old Ricky Martin CDs from 1999. They were living 'La Vida Loca!'

The Nasdaq surged 1.2 percent at the opening bell thanks to Yahoo!'s strong first quarter results (whisper numbers, schmisper numbers.), increased sales guidance from Dell and news from employee outplacement firm Challenger, Gray & Christmas that the level of job cuts in the tech sector during the first quarter was the lowest in more than three years.

Still, all this cheer and sunshine was not enough to generate a full-blown rally. Sure, Dell and Yahoo! remained strong throughout the day: Shares of Dell (DELL: Research, Estimates) rose more than 2 percent while Yahoo! (YHOO: Research, Estimates) skyrocketed 16 percent. But the Nasdaq gave up nearly all its gains by the close and finished up just 0.1 percent.

What happened?

Tech investors may have put down their flutes of Cristal to ponder some tough questions. Was Thursday's early euphoria really a sign of a new great bull run for tech? Will all major tech firms meet and beat their first quarter estimates?

Tech stocks have surged during the past 12 months on hopes of substantial profit growth.

Or are there more Nokias lurking out there, companies that will break hearts with disappointing numbers? Investors may not have been ready to forget Nokia's surprise warning Tuesday and the tech sell-off it caused.

But there are no easy answers. As convenient as it is to categorize things in black and white terms and treat tech with a broad-brush approach, it's not really that simple. The ecstatic reaction to Yahoo!'s report was probably a little overdone. But so was the doom and gloom routine after Nokia's warning.

Clearly, not every tech company is going to do as well as Yahoo!, which is riding a wave of momentum in one of the brightest subsectors of tech. According to First Call, the Dow Jones Internet Services sector is expected to post a 124 percent increase in first quarter earnings this year.

Some sectors are still experiencing relatively sluggish growth prospects. Tech services earnings are only expected to increase 6 percent from a year ago while analysts are forecasting 14 percent growth for software.

Overall though, the S&P Technology sector is expected to post a 53 percent year-over-year increase in earnings. But to put this big number in context, we need to rewind the calendar a bit.

All techs aren't created equal Grwoth rates for different subsectors of tech vary widely for 1Q and the full year. Industry  Est. 1Q EPS Gr.  Est. 2004 EPS Gr.  Computers  18%  21%  Communications tech  161%  98%  Hardware  17%  20%  Internet services  124%  71%  Semiconductors  569%  132%  Software   14%  13%  Tech services  6%  20%   * based on Dow Jones industry indexes  Source:  Thomson First Call

At this time last year, nobody in tech was celebrating. The economic recovery was still tenuous. Tech CEOs were talking about how customers were so spooked by the war in Iraq and other "geopolitical concerns" that they were holding back spending.

As a result, tech earnings in the first quarter of 2003 were only up 17 percent from a year ago. That means it should be relatively easy for many tech companies to look good in this year's first quarter.

Plus, Yahoo!'s blowout quarter could actually make it tougher for others to wow Wall Street. Yahoo!, by virtue of being the first major tech to report, has set the bar extremely high for other techs.

It's kind of like going to a concert and seeing the Beatles as an opening band for, well, Ricky Martin. The main act is bound to be a let down.

In fact, Research in Motion, the company behind the popular Blackberry messaging technology, issued a fiscal fourth quarter earnings report Wednesday that was a mirror image of Yahoo!'s. The company beat estimates, raised guidance and announced a stock split.

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But shares of Research in Motion (RIMM: Research, Estimates) tumbled more than 2 percent on the news Thursday. Before the report, the stock had surged more than 60 percent this year. So investors clearly wanted even better results.

Todd Campbell, president of E.B. Capital Markets, an independent research firm that caters to institutional clients, said he expects more of this to happen with tech momentum stocks as earnings season kicks into high gear next week. Expectations remain high, and for that reason, he said, investors should pick and choose when looking at tech stocks.

And looking ahead to the third and fourth quarters of this year, earnings comparisons in tech will become far more difficult because the second half of 2003 was so strong.

Pip Coburn, global tech strategist with UBS, wrote in a report Thursday that the third quarter sales estimates for the S&P Tech sector are calling for a larger than usual seasonal pickup in spending by corporations. He thinks that might be doable but that earnings growth should begin to slow going into 2005.

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Coburn added that investors will probably begin to focus on 2005 earnings estimates as early as next month, once most of the first quarter reports are out of the way. And he said he sees only two logical scenarios, neither of which is encouraging.

If investors don't figure out that 2005 estimates are too high, that will set up what Coburn calls "a date with a wretched earnings-miss destiny in the future." Or investors will "begin to realize tech is not the Utopia featured during large slugs of the '90s when sub-25% EPS growth seemed suspiciously conservative."

So despite all the day's good news in tech, it doesn't look like 1999 all over again. But considering what happened in the three years after 1999, that's not necessarily a bad thing.

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