Sep 16, 2014 · 4 minutes

Remember all that talk about a tech bubble last spring? Remember the tech slump that followed, knocking stocks like Facebook and Netflix into double-digit declines over a matter of weeks? It all seems like a distant memory now, even though it fanned the flames under a lot of debates back then.

Since then, investors in publicly traded tech companies have enjoyed a quieter summer of contentment. Since mid-May, Facebook has risen 30 percent percent, LinkedIn 49 percent and Twitter 60 percent.

Not all companies have rallied so strongly: Google is up 13 percent in that same time period, and Amazon is up 10 percent, both roughly in line with the Nasdaq Composite's 12-percent gain. Large-cap veterans with exposure to the Internet are up modestly, with Microsoft rising 20 percent and Apple rising 19 percent. And some small companies demonstrating growth are rallying even more: Zendesk has risen 62 percent and Trulia 76 percent.

Yet the summer tech rally wasn't expected back in April and May, when tech stocks were declining. And even more weirdly, most of these stocks are trading higher than they were back in February and March, when rising tech stocks were sounding alarms of another bubble emerging in the tech sector.

A Google Trends search for “tech bubble” over the past year shows searches on the term peaking in April before quieting down in recent months despite a rise in tech stock prices and valuations. The same search over the past eight years shows a peak every few years, adding credence to the charge of tech optimists that naysayers have been calling for a bubble for the past decade

What's going on? There isn't a single straightforward answer, but there are several factors at play that, upon examination, offer some insight into whether tech investors are once again ready to throw caution to the wind when it comes to valuing stocks.

One factor is that some companies are continuing to show growth that exceeds investor expectation. Facebook is the prime example, beating analyst increasingly bullish estimates on strong mobile growth, but older companies that investors were ready to give up on, like Microsoft and Apple, have shown they have room for growth in their futures.

An increase in the number of billion-dollar-or-more M&A deals in 2014 has also added to a sense that the cream of tech companies are seeing an increase in value: Google buying Nest, Apple buying Beats, Amazon buying Twitch, Microsoft buying Mojang. The bold, big-ticket acquisition is a strategy that more and more companies are taking from Facebook's playbook. We won't know for years which of these deals will pay off, but a clear trend is emerging.

A third factor is the easy-money stance of central banks, which has weighed down interest rates and left investors scrambling for securities that can offer higher returns. The capital gains of growing tech companies has been one area. Last spring, when consensus emerged that the Fed would put on the brakes, tech stocks slumped. That consensus proved wrong, and stocks rallied again. However, consensus is again building around a shift to tighter policies next year.

And finally, one reason for the summer rally was the spring slump itself. Many stocks had risen too, fast too quickly, and the spring selloff was just strong enough to let the some of the air out of the market. Rallies rarely go up in a straight line – or when they do it's usually a sign of a mania. So paradoxically, the slump left investors more confident about a longer-term advance in tech stocks.

Taken together, these four factors show a market in which technology shares remain overvalued and risky. There is evidence of impulsive, if not greedy behavior – some of the billion-dollar acquisitions will work out, but I doubt they all will – and changing central bank policies may cause money to shift from tech to other investments.

Yet while the possibility of a bubble is always nearby, the risk of one in tech right now still seems pretty low. The market has shown an ability to correct when it needs to, and some – though certainly not all – companies working in the Internet are showing they can keep growing above expectations.

It's true that people have been warning of bubbles for the past decade, but while it results in a steady diet of humble pie for some, it may not be a bad thing. That's because bubbles are caused by irrational behavior in markets, and irrational behavior is always present in markets. It only inflates bubbles when the irrational behavior scales up to a point where even the more sensible minds start to worry about being left out of massive capital gains.

This week, venture capitalist Bill Gurley warned of signs of dot-com-era risk, like costly 10-year leases. Other signs have been around for a while – lavish parties, arrogant behavior among execs, ceos offering reporters friends and family shares in IPOs. As anecdotal evidence, these are all troubling, yet there still aren't enough of them to allow for more than speculation about the possibility of a bubble somewhere down the line. Irrational behavior is always a part of the stock market. For now, at least, it hasn't become the rule.