(Story updated to add that Rackspace shares hit a record high earlier this week after the company reported a strong fourth quarter.)
BOSTON ( TheStreet) -- Technology stocks are off to a blazing start this year, as evidenced by the sector being the best performer in the S&P 500 through Feb. 10 with a gain of 10%.
And information-technology prices hit highs not seen since 2001 at the end of last week, according to S&P's MarketScope Advisor.
The gains are due to investors' renewed confidence in worldwide economic growth this year and an outlook for a rise in corporate IT spending as firms update their technology after several years of making do with what's now outdated technology.But investors need to be cautious as the market may have gotten ahead of itself amid lingering concerns over both the economic impact of a resolution to the European sovereign debt crisis and the strength of the U.S. economy. In light of that, S&P MarketScope Advisor downgraded its IT sector recommendation to "marketweight" from "overweight" earlier this week. The firm's Feb. 15 research note said that although there continue to be "decent fundamentals, attractive valuations and strong balance sheets across the sector, we see risks related to the expiration in December 2011 of some beneficial government actions and some potentially unfavorable upcoming seasonality." Nevertheless, S&P noted that it has "dozens" of technology stocks rated "buy," and eight rated "strong buy," indicating there are bargains to be had, despite the uncertainties, and so long-term investors should consider buying on dips. To find the better-rated fast growers in the category, we screened a stock database for aggressive growth technology stocks -- those with several years of strong sales and earnings growth -- that have solid fundamentals, a market value of at least a $1 billion, and share-price gains of at least 20% this year and came up with 15 stocks. And, no, Apple (AAPL ), isn't one of them, as it is considered a large growth, cyclical stock. Here are the 15 top-performing technology stocks with returns of 20% or more this year ranked inversely by return: