Tech: Are happy days here again?

Is it time to dust off the party hats?

From the cheery headlines accompanying the latest round of tech earnings, you'd think so. Google (GOOG) CEO Eric Schmidt declared last week that, "the worst of the recession is behind us." IBM (IBM) actually boosted earnings targets for the year. Taken along with the stimulus potential of Windows 7, Microsoft's (MSFT) critically acclaimed PC operating system that launches this week, some say happy times are here again.

Not so fast. As we head into week two of this round of tech earnings, it's important to keep in mind what these numbers show, and what they don't.

What they show is this: we seem to have dodged the worst-case scenario. In those dark post-Lehman days at the beginning of the year it seemed the global economy was headed off a cliff, and nary a big tech CEO dared predict a recovery in 2009; as stock prices plunged and customers bolted, the sunniest forecast most would offer was carnage this year, followed perhaps by less carnage in 2010.

Now it's a different story. Since the March market rebound and some calming statements from Fed Chairman Ben Bernanke, the suits have changed their tune. Intel not only reported a blowout quarter, but also pointed to a healthy holiday season; even embattled Advanced Micro Devices (AMD) said it expects a modest rise in sales. No one knows exactly what Apple (AAPL) will say when it reports earnings this week, but it probably involves an obscene volume of iPhones. In a turnabout from a year ago, all across Silicon Valley executives are whispering about an upbeat Q4.

So what's not to like? Well, what these numbers don't show is sustained revenue growth – the stuff that healthy earnings, stock prices, and economies are built on. IBM's quarterly sales were down from a year ago, as were Intel's. Other companies saw modest increases, but it's too soon to tell whether the credit belongs more to a mounting recovery or to easier comparisons with last year – remember, things got bad right at the end of the third quarter, making these reports look impressive by comparison. Even the holiday season numbers won't shed much light on whether this is a strong tech recovery or a weak one; last year's Q4 numbers were so horrible that it won't take much to blow them away.

No, to get a true read on the strength of this recovery, we'll have to wait until April, when the big techs start reporting Q1 numbers. By then the euphoria of averted disaster will have worn off, and we'll see if consumers and businesses have anything left to spend after the holiday season.

If sales slow down dramatically, we could be in for something like the uninspiring "L-shaped recovery" that Oracle (ORCL) CEO Larry Ellison predicted last month. If they continue chugging along despite high unemployment and foreclosures, then those party hats might be in order.