Tech Could Start Looking Cheap Again

Here's something to think about. Tech's going pretty well without the economy doing well. What happens if things catch on fire?

Let's take the case of Intel (INTC - commentary - Cramer's Take). I continue to think that Intel is doing quite well in this environment and that the consensus for Intel is too low. It may be way too low. I am not as bullish as Tom Kurlak, who thinks Intel could earn $1.20 next year. I remain at the controversial $1 level, well above consensus and hugely above what my friend Bill Fleckenstein thinks it can earn. I also think it can pay a much bigger dividend.

I feel the same way, dividend-wise, about Microsoft (MSFT - commentary - Cramer's Take) and Cisco (CSCO - commentary - Cramer's Take). Neither company is setting the world on fire, but it's not like these companies are losing money. In fact, given that they all have weak-dollar winds at their backs and that business hasn't gotten worse, I wonder if they, too, might be earning more than people expect.

I own Hewlett-Packard (HP - commentary - Cramer's Take) in part because I believe estimates are too low for that giant company. And it wouldn't surprise me if the numbers for IBM (IBM - commentary - Cramer's Take) -- again, a weak-dollar beneficiary -- were too low.

Meanwhile, the stocks basically have done very little. Intel's up nicely from the bottom, but the others haven't shown much. As we turn the page -- don't forget that next week we will stop caring about 2003's numbers and be focusing on 2004's -- I think you will be staring at a bunch of stocks that will seem downright cheap, given where interest rates are.

On my radio show, RealMoney With Jim Cramer, we play a game on Wednesdays called "Am I Diversified?" I used to dread the game because everyone owned tech, tech and more tech. Now when we play, it is amazing. Unless someone is from Seattle, where Microsoft is most definitely overowned, nobody seems to have any tech at all. That's extraordinary: an underweighted group in which the earnings might come through that everybody's afraid to have much exposure to because of the past and because of the traditional summer slowdown.

What can I say? I know the Nazz is up big this year so far. I know that most people now think tech is overvalued. I don't see it that way.

Especially if these companies embrace the religion that Bank of America (BAC - commentary - Cramer's Take) and Goldman Sachs (GS - commentary - Cramer's Take) showed, and Citigroup (C - commentary - Cramer's Take) will show on dividends. These companies, above all others, can pay real whoppers. If they want to get their stocks up, they better start doing so.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. At the time of publication, Cramer was long Intel and Hewlett-Packard. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."