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For tech investors, it all comes down to spending. How much money will companies and consumers fork over for computers, servers, cellphones, and other high-tech products? For certain, spending has stabilized after a multiyear decline triggered by the end of the dot-com spending spree. The trouble is that investors have been so eager for a return to the go-go days that they have once again bid up many of the leading companies to unsustainable levels. (Note the trailing P/E of 30 for the Nasdaq 100 and its 0.04 percent dividend yield.) Indeed, all this exuberance is based on what surveys suggest will be a mere 4 percent to 5 percent increase in tech purchasing in 2004.

Richard Chu of S.G. Cowen is quietly recommending a different strategy. This soft-spoken 57-year-old researcher will never be mistaken for a Wall Street "ax." Chu, a repeat performer from last year's All-Star list, is self-deprecating and a bit of an egghead. Even close competitors do a double take when they hear his name. Yet when it comes to picking tech stocks, no one has a better track record. Of the nearly 400 tech analysts, Chu is one of only five who have made money for investors in each of the past three years -- and he's been by far the top performer. Chu has averaged a 19 percent gain over that period against the Nasdaq's 5 percent average annual decline. With a 36 percent gain in 2003, Chu bested his median peer by a stunning 27 percentage points.

Chu is no tech bull. His concern is that personal computers, in particular, have been commoditized, and that absent a spectacular surge in spending, companies will have no power to increase prices. But one company Chu thinks deserves some attention from investors willing to take a flier is Sun Microsystems (SUNW, $4). It's risky because the company has been bleeding losses since the end of the dot-com boom. However, there are signs that it could be turning around. This year Sun, which makes servers that operate computer networks and websites, is expected to turn its first profit since 2000.

The main rationale Chu has for buying the stock now is the $6 billion in net cash Sun has in its coffers, including $2 billion from a legal settlement with Microsoft. That money should be enough to keep Sun solvent. And subtracting the cash hoard from its market cap suggests that investors are valuing the business at less than $2 per share. If the company can get any operating momentum at all, it could be a steal. Sun has announced plans to cut 3,500 jobs and realign sales to bring in more recurring revenues. The company has also said it is developing a simpler, more competitive pricing structure for its products. "The market is saying Sun will not survive," says Chu. "Can I guarantee they will? No. But they have tons of cash and a very unique product."