The tech index of the S&P 500 is hitting levels not seen since the infamous dotcom era, but that doesn't mean we're in a bubble. 

The information technology sector of the S&P 500 was trading at $991.14 in the early afternoon on Thursday, topping its previous high of $988.49 set in March 2000. The tech index includes Apple (AAPL) - Get Report , Microsoft (MSFT) - Get Report , Facebook (FB) - Get Report and Alphabet (GOOGL) - Get Report , although it's notably missing Netflix (NFLX) - Get Report and Amazon.com (AMZN) - Get Report

But while the index is trading at highs set 17 years ago, there's one big difference: the prices are justified this time around, according to Tigress Financial CIO Ivan Feinseth.

"I don't think it's another bubble," said Feinseth. "Back then everyone was buying anything with a '.com' in its name even though they didn't have proven business models, but today the tech companies are mature and profitable businesses." 

While a number of mega cap tech companies are hitting new highs in 2017, it's well-deserved because they're leaders at what they do, Feinseth pointed out. For example, Amazon is up 37% this year because it's leading retailers into a new era of shopping and fulfillment.

On the other hand, toy retailer website eToys.com was founded in 1997 without a proven business model, yet had an incredibly successful IPO in 1999 with shares opening at $20 and closing at $76. The company filed for bankruptcy just two years later in 2001. 

While the tech index is trading at about 23 times the past 12 months' earnings as of Tuesday's closing bell, that's much less worrisome than what was happening in March 2000 when it was trading at 70 times the past 12 months' earnings, according to Factset.

Facebook, Apple and Alphabet are holdings in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB,AAPL or GOOGL? Learn more now.

More of What's Trending on TheStreet:

Watch More with TheStreet:

  • From Catalogs to Catastrophe: A Sears Timeline

The tech sector dropped quickly and dramatically after the dot-com era, came back up in 2007 before dropping again in the 2008 recession, and has now recovered to new highs as seen in the chart below: 

Image placeholder title

Tech stocks are also the best performers of the Nasdaq's eleven sectors this year. The information tech index boasted a 22.7% year-to-date gain as of Thursday morning, while the overall S&P 500 has gained a more modest 10.4% year-to-date. 

Feinseth argued that tech companies are leading the market because they are the leading companies of 2017. Alphabet and Facebook are leading in marketing, Apple is leading the supplier market and Amazon is leading the shopping market. "It makes sense," he said. "The market is being led by real companies with growing profits and revenues." 

Not all tech experts are so confident. Former Microsoft  (MSFT) - Get Report CEO Steve Ballmer said last Friday on CNBC that investors weren't wrong to be worried. "Are we in a market bubble or not? I don't know. I'm silent on it. Where multiples are, etc., you could be a little worried," Ballmer said. 

The tech index's performance is in spite of S&P placing Netflix and Amazon in its consumer-discretionary sector, rather than tech companies. Netflix is trading up 49% year-to-date to $184.19 after blowing away subscriber estimates with its second quarter report on Monday. Amazon is trading up 37% this year to $1,029.16, with investors particularly excited about how it can disrupt the grocery industry with its recent Whole Foods (WFM) acquisition. 

Tesla (TSLA) - Get Report  is another stock missing from the index. For his part, CEO Elon Musk has repeatedly said that his electric car company's stock is overvalued. "I've gone on the record several times that the stock price is higher than we have the right to deserve and that's for sure true based on where we are today," Musk said at the National Governors Association meeting on Saturday. 

Feinseth said that shares of Tesla are obviously overvalued compared to other automakers' stocks, but if you classify it as a tech company, then it's simply highly valued. The much-hyped $35,000 Model 3 from Tesla is a great car that will be a game changer, he added. Musk said production on the Model 3 should ramp up quickly with 100 Model 3s produced in August, followed by up to 20,000 produced per month starting this December.

The biggest risk going forward for tech investors is if there's a rotation to other sectors that may have more room left to run up, Feinseth noted.