Sun Microsystems' preliminary results pleased investors, but I'm not buying

Sun Microsystems' (NASDAQ: JAVA) preliminary numbers for the fourth quarter sparked an after-sessions rally on Tuesday. The tech entity said it should see somewhere between $3.7 billion and $3.8 billion for the top line. Earnings per diluted share will come in between $0.25 and $0.35 on a non-GAAP basis. Gross margin should be at least 44%.

Wall Street was apparently happy that Sun didn't expect an earnings bomb, according to this Reuters article. Understandable, considering the current state of the economy. It looks like Sun has an okay chance of meeting or beating earnings expectations. Reuters says that analysts are looking for 10 cents per share on a GAAP basis. Management is looking to do somewhere between 5 cents and 15 cents per share. It's too bad the range wasn't more narrow, but I guess the theme here is that if business is at least this good, then the shares are a buy.

As for me, I'm not sure I see the merit of the euphoria. Sure, things could have been worse, but that doesn't mean I want to buy Sun here. The stock has done horribly this year, losing 50% of its value year-to-date (at least before the rally). I think investors should be very careful about chasing values during these bearish times. It's hard to say how bad the recession will be, and how it will affect the tech names. Companies such as Hewlett-Packard (NYSE: HPQ) and Microsoft (NASDAQ: MSFT) have seen their stocks pressured by sellers. If the shares of those blue chips are having problems, I can't see why I'd want to chase Sun Microsystems.

Disclosure: I don't own any company mentioned; positions can change at any time.