BOSTON ( TheStreet) -- Technology stocks are back.

The industry produced strong quarterly earnings after a rebound in business spending. Mega-caps Intel ( INTC) and Microsoft ( MSFT) beat analysts' earnings estimates by a margin of 20% and 10%, respectively. Their stocks have gained 4% and 5% since the quarterly releases. Small-cap data integrator Informatica ( INFA) exceeded estimates by 9% and its stock is up 14% since the announcement.

Informatica designs and sells data-integration software, helping companies simplify their technology infrastructure and reduce costs. It is a fast-growing player in the industry, serving financial-services firms, health-care companies and public-sector enterprises. Second-quarter net income increased 45% to $17 million, and earnings per share climbed 31% to 17 cents. Revenue rose 33% to $156 million.

Informatica recently announced a partnership with storage giant EMC ( EMC), which will sell Informatica's Lifecycle Management and Master Data Management products through its EMC Select program. Despite a market value of just $2.8 billion, Informatica does business with 84 of the Fortune 100 companies, demonstrating the relevance of its offerings. It inked repeat business with 351 customers during the quarter and added 68 new clients to its roster.

Recent success has pushed the stock to a premium. Informatica sells for 43 times trailing earnings and 24 times forward earnings, reflecting 53% and 17% premiums to software-peer averages. However, the stock's PEG ratio, a measure of value relative to predicted long-run growth, of 0.7 signals a 30% discount to fair value. Its enterprise value to EBITDA ratio of 20 is expensive, but less than that of fast-growers Citrix ( CTXS) and Salesforce.com ( CRM).

Since 2007, Informatica has grown sales 17%, annually, on average, and boosted net income 18% a year. Its stock achieved annualized gains of 29% over that span, outpacing technology benchmarks. Sell-side analysts are optimistic about the stock, with 12, or 75%, rating it "buy" and four ranking it "hold." The stock is 11% below the consensus target of $33.17. Gleacher & Co. ( GLCH) predicts it will hit $41 and Stifel Financial ( SF) says $35.

Informatica has gained 63% during the past 12 months, beating the Nasdaq by 48 percentage points. It ranks as the 168th best performer in the technology sector, trailing a slew of semiconductor stocks and lagging ever-so-slightly behind perennial favorite Apple ( AAPL).

Informatica holds $363 million of cash and $201 million of debt. While the company's financial position is ideal and its prospects attractive, the stock's recent run-up is discouraging. Microsoft boosted quarterly profit 48%, sells for a forward earnings multiple of 9.9 and has nearly $37 billion of cash on hand, with just $5.9 billion of long-term debt.

Although small-cap tech names such as Informatica, which recorded a 52-week high Monday, have earnings momentum, the mega-caps still offer compelling value. Microsoft has gained just 13% in the past year, ranking 394th within the tech space. Of researchers following Microsoft, 33, or 83%, rank it "buy." A median target of $33.51 suggests a 30% return. There's no reason to chase the growth names. Boring old Microsoft is a great buy.

-- Reported by Jake Lynch in Boston.

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