Don't expect the sagging euro to weigh down big tech stocks.

A bunch of blue-chip companies, from


(MCD) - Get Report



(AA) - Get Report



(DD) - Get Report

, have warned in recent weeks that the plunging euro will pressure their earnings. That has led some investors to fret that the European currency's retreat will hammer tech earnings as well, as many of the big-name tech companies derive just as much of their earnings from Europe as do McDonald's and DuPont.

But market observers remain sanguine about tech earnings, saying that the rapid growth of big networking, semiconductor and software companies should more than offset the weakness in the European currency. Another factor favoring the big tech stocks amid euro weakness: Many tech companies do business primarily in dollars, reducing the impact of currency fluctuations. So even though the


has retreated this month, giving back its August rally, market players don't see currency worries as a significant problem.

Pump up the Volume

"While household products and networking companies may have the same exposure" to the euro, said Doug Cliggott, equity strategist at

J.P. Morgan

, "the volume growth in networking is a heck of a lot faster."

Case in point: When it reported first-quarter earnings earlier this month, software behemoth


(ORCL) - Get Report

reported no discernable euro effect. Earnings more than doubled, to 17 cents a share, even though about 20% of Oracle's sales come from Europe.

Other fast-growing companies, including


(CSCO) - Get Report


Sun Microsystems

(SUNW) - Get Report

, are offsetting currency weakness through sheer sales growth. Ditto for software-monitoring companies like

Mercury Interactive






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Keep It Here

Charlie Glavin, semiconductor analyst at

Credit Suisse First Boston

, notes that the chip makers do significant business overseas but shouldn't be hurt by the euro for a couple reasons. First, chip makers are protecting themselves from currency upheaval by increasingly doing business via contract, rather than through the spot (for immediate delivery) market. This trend could protect earnings at companies such as


(INTC) - Get Report


Advanced Micro Devices

(AMD) - Get Report



(XLNX) - Get Report



(ALTR) - Get Report


More important, tech companies do an increasing proportion of their business, no matter where, in dollars. Processor prices, for instance, are most often quoted in dollars, which of course negates any euro effect.

This trend goes far beyond the chip industry, and could insulate tech firms big and small from currency fluctuations. Cisco CEO John Chambers, for instance, soothed investors Tuesday when he said the company derives most of its revenue in U.S. dollars, even though Cisco has a significant presence in Europe.

"Our revenue and expenses in foreign currencies, especially Europe, offset each other," said Steve Moore, vice president of finance at fiber optic behemoth

JDS Uniphase


. "In the fiber optics world, most transactions are U.S.-dollar based."

Of course, not all tech companies are growing like gangbusters, and that's where the euro may still make its mark on tech stocks. PC makers like


(IBM) - Get Report




are growing more like McDonald's than like JDS;

Goldman Sachs

downgraded IBM with currency issues in mind a couple weeks ago. But with even the great highflier of the 1990s,


(DELL) - Get Report

, trading near its 52-week low, investors are probably less worried about the PC stocks, anyway.

As originally published, this story contained an error. Please see

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