Don't look now but tech stocks are back.

Shares of Nortel have increased nearly eight-fold in just over a year; Intel and Hewlett-Packard are at 52-week highs; and investors are salivating over the prospect of an initial public offering from all-world search engine operator Google Inc.

"As bad as things got during the technology winter, at least there's a bounce-back. Spending taps that were shut off at least were coming back a little. That's one of the reasons why the Nasdaq was up 50 per cent [in 2003]," said Duncan Stewart, a partner at Tera Capital Corp. which manages some technology mutual funds.

The tech-heavy Nasdaq Composite Index started 2003 at 1,336.83 and closed it out at 2003.37, a rise of 49.86 per cent.

This week, investors drove shares of Nortel Networks Corp. of Brampton, Ont., which trades on the Toronto Stock Exchange and the New York Stock Exchange, up nearly 35 per cent. On Wednesday, Nortel announced a $1-billion (U.S.) deal to sell new gear to Verizon Communications Inc. Not only is Verizon the largest phone company in the U.S., it's also historically used Nortel rival Lucent Technologies Inc. of Murray Hill, N.J. as its preferred vendor.

In choosing Nortel over Lucent, Verizon seems to be validating Nortel's stubborn determination to stick to its research and development guns even during those dark days of the fall of 2002, when Nortel's stock was trading as low as 69 cents a share on the TSX.

"Innovation has continued and you're going to see a lot more of the industry coming back and talking about the innovation and demonstrating what it means to business and to end consumers," Nortel CEO Frank Dunn said in a speech last December.

Stewart of Tera Capital stood by Nortel during those dark days, buying up the maximum amount of Nortel shares his fund would allow for around $1 a share.

He's since sold much of what he bought at a tidy profit, although Nortel still makes up about 5.5 per cent of his flagship StrategicNova Canadian Tech Fund and he's still bullish on Nortel's future.

Nortel's stock is now nearing $8 a share, and while that's a long way from its Internet bubble highs of over $120 a share, many analysts think $10 a share is just around the corner.

Nortel isn't the only Canadian tech company enjoying a renaissance.

Waterloo, Ont.-based Research in Motion Ltd., the maker of the Blackberry handheld computer, said this week it would raise nearly $1-billion (U.S.) by issuing new shares. The company won't say what it needs the money for but speculators think RIM may want the cash for an acquisition or to buy out some of its legal adversaries. RIM is fighting some patent battles in the U.S. which threaten to drain some of the company's royalties.

RIM's stock is up more than 50 per cent over the last three months.

RIM's neighbour in Waterloo, software maker Open Text Corp. has also enjoyed a nice pop in its stock, up about 25 per cent in the last three months.

On Thursday night this week, Open Text pleasantly surprised investors by warning that its revenue and profit for the quarter ended Dec. 31 are going to be higher than expected. Open Text CEO Tom Jenkins noted that his company will have set an all-time sales record in the quarter.

"This is actually a sustainable kind of selling going on. It isn't people building fibre-optic networks in case every hamster on the planet wants to sign on to the Internet," Stewart said.

Others in Canada's tech universe are also doing well, from video card maker ATI Technologies Inc. of Markham, Ont. to Tundra Semiconductor Inc. of Ottawa.

South of the border, it's much the same story. Intel Corp., the world's biggest maker of microprocessor, saw its shares hit a new 52-week high on Friday. Earlier in the week, Hewlett-Packard Co., the world's number two computer maker, hit its 52-week high.

In the meantime, tech investors can't wait for the initial public offering (IPO) of Google Inc. While Google hasn't made anything official yet, it's one of the worst-kept secrets in Silicon Valley that it will go public this spring, in an offering that could give it an instant market value of tens of billions of dollars.

Tech investors believe a Google IPO could spark the same kind of market frenzy this year that Netscape Communications sparked when it went public in 1997.

"We see 2004 being another very good year for technology. Fundamentals are beginning to improve. We actually see better strength coming along here," said Stewart. "We are starting to see very, very good numbers."

-email: David Akin