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There’s devastation everywhere on the tech landscape.

Share prices have been battered. Market caps have been crunched. Years of profits rolled back. There’s no loss of life in the stock market, thankfully. But the loss of capital has left many people in dire financial straits.

Some of the world’s largest companies have been pummelled. As of July 8, Apple Inc. was down almost 20 per cent from its 52-week high. Alphabet Inc. had given back 21 per cent. Microsoft Corp. had lost 23 per cent. Inc. was down 39 per cent despite a 20-for-1 share split. Tesla Inc. had dropped almost 40 per cent.

And those were the comparative winners. Pandemic darling Zoom Video Communications Inc. was down 70 per cent from the high of US$406.48 it touched about a year ago. Canada’s Shopify Inc. had given back 80 per cent despite a 10-for-1 stock split. Coinbase Global Inc. was down 84 per cent.

Over all, Nasdaq is off 28 per cent from its 52-week high reached last November.

These are scary numbers for people who invested heavily in the technological revolution. But we’ve seen worse. Tech Wreck I, the 2000 collapse usually called the dotcom bubble, saw Nasdaq lose 78 per cent until it finally bottomed out in October, 2002. It took more than a decade for the index to regain its precrash high.

If we’re witnessing a repeat, Nasdaq still has a long way to fall, and investors face a lot more pain. I don’t think that’s how this will play out.

In 2000, the widespread use of the internet was in its infancy. It was a Wild West show as companies, many of them undercapitalized, scrambled for a share of what was seen (correctly, as it turned out) as a financial bonanza.

When investors collectively realized they were bidding up shares of unprofitable companies to absurd levels, the bottom fell out. Many firms went belly-up, their shares worthless. They included long-forgotten names such as Webvan, and, as well as companies that made the Financial Hall of Infamy, such as WorldCom.

It’s a different situation today. Most (but not all) of the big tech names are well-capitalized, profitable companies. The emergence of the tech bear has brought their prices back to more reasonable levels. Price-to-earnings ratios are still high but no longer in the stratosphere.

Alphabet, which is one of the recommendations in my Internet Wealth Builder newsletter, is an example. The drop in its share price has pulled its P/E ratio down to 21.49. This is a company that made US$16.4-billion in the first quarter, or US$24.62 per diluted share.

Or look at IBM, another of our recommendations. While the tech market was slumping, its stock hit a 52-week high of US$144.73 last month and is still trading near that level. Plus, it pays a quarterly dividend of US$1.65 a share (US$6.60 a year) to yield an attractive 4.7 per cent.

So, is this a time to get back into tech, presuming you are not overweighted already? Perhaps, but selectively. Nasdaq has recovered about 10 per cent from its mid-June bottom. That’s not enough to convince me it’s not a dead cat bounce. I prefer to see a rebound of 20 per cent or more before I’m satisfied that a real momentum change has occurred.

That said, IBM, Microsoft and Alphabet look reasonably priced at current levels. If you’re considering any of these for your portfolio, take a small position now and add to it if the price drops more. Five years from now, today’s prices will look like bargains.

Gordon Pape is the editor and publisher of the Internet Wealth Builder and Income Investor newsletters.

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