Following a strong 4-month rally, the tech sector might once more be a stock-picker's environment.

Which is to say, generating good returns is likely to require a greater level of selectiveness than it has in recent months. Valuations and business trends could both figure prominently in determining which tech companies are able to keep rallying from this point on.

In December, as tech stocks tumbled across the board, we didn't have a stock-picker's market as much as a market where a wide variety of tech stocks looked like buys as long as macro and cyclical conditions didn't serious deteriorate due to a trade war and/or hawkish Fed policies. Valuations for tech companies in many different industries fell sharply, enough so that -- while some of the beaten-up names have performed better than others since then -- generating good returns at that time was less about being a stock-picker than simply about having a healthy conviction that the sky wasn't falling.

I felt that chip stocks and Chinese tech stocks, two groups of companies that had gotten quite cheap as the Nasdaq tumbled, looked especially well-positioned to rally if macro and cyclical fears proved overdone. Both groups of companies have rallied strongly since then, but admittedly, the same could be said for U.S. software and Internet stocks, many of which carried higher multiples, as well as various other tech names.

Where do tech stocks go from here? The simple answer would be to say that names with less-inflated multiples are likely to do better, now that a fair amount of across-the-board multiple inflation has happened. But while valuations are bound to matter, one also can't ignore the fact that business conditions and risks can vary quite a lot from one group of companies to another.

When looking at chip stocks, for example, I think it's fair to be more cautious at this point about names that now carry high multiples, such as Xilinx  (XLNX) - Get Report and Cree (CREE) - Get Report , and to view analog, microcontroller and RF chip names carrying lower multiples (for example, ON Semiconductor  (ON) - Get Report or Qorvo (QRVO) - Get Report ) as having a greater margin of safety. But it might also be worth taking a cautious approach to chip equipment names that sport moderate multiples, but which have rallied strongly from their December lows and could see soft second-half demand amid weak memory capital spending.

Enterprise software, meanwhile, is a space where many names now possess sky-high forward billings and free cash flow (FCF) multiples. The fact that secular growth trends remain strong for many names in the space has helped inflate multiple, and so has the fact that the group is (thanks in part to the industry's shift from software license sales to subscriptions) seen as relatively immune to macro headwinds. As a result, while it's quite possible that companies such as Workday (WDAY) - Get Report , Atlassian (TEAM) - Get Report and ServiceNow  (NOW) - Get Report will continue seeing strong growth, achieving that growth doesn't guarantee investors will see strong returns over the next 6-to-12 months.

One possible option for playing enterprise software in such an environment is to scan for names that have been beaten up some due to earnings or guidance disappointments, but which still have strong long-term growth drivers. Nutanix (NTNX) - Get Report , a top provider of hardware and software used to deploy hyperconverged infrastructures, is one name that might fit the bill here. Zuora (ZUO) - Get Report , a top provider of software used by businesses to manage their subscription offerings, is another.

Other options still exist for tech stock investors looking for secular growth stories at reasonable valuations. For example, security hardware and software suppliers such as Palo Alto Networks (PANW) - Get Report  and Fortinet  (FTNT) - Get Report still don't look too expensive relative to FCF estimates. And value can also still be found in large-cap tech names such as Alphabet/Google  (GOOGL) - Get Report , which is still seeing 20%-plus sales growth and whose near-term earnings are depressed by investments in nascent businesses, and Booking Holdings (BKNG) - Get Report , which sold off thanks to a disappointing Q4 report but still looks well-positioned to do well as the online travel industry keeps growing.

Value can still be found in tech -- though some frothiness exists here and there, we're far removed from the excesses of the bubble. But being selective and disciplined about which tech stocks one picks could matter a lot more going forward than it did in December.

Alphabet and Palo Alto Networks are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells GOOGL or PANW? Learn more now.