It looks like a spoonful of alphabet soup sitting at the top of the list. CACI International Inc. and GTSI rank first and third, respectively, in BusinessWeek’s Info Tech 100, ahead of such powerhouses as Microsoft Corp. and Dell Computer Co. These little-known companies are making money, lots of it, prepping America for war.

CACI, in Arlington, runs computer systems for the Pentagon and the Federal Aviation Administration). In just the past two quarters, it has raked in $1.1 billion in new government contracts. GTSI, in Chantilly, which sells 93% of its computers and software to the federal government, boosted its net profits 56%, to $3.1 million, in the third quarter.

And expect the rich to get richer: the $52-billion federal tech budget, which rose 10% this year, could grow faster next year as the new Homeland Security Department takes shape. "The US is at war," says GTSI CEO Dendy Young. "There’s a heightened level of urgency."

Say "Boom!" today, and investors hear the explosions from heat-seeking missiles. It’s quite a change from the dot-com days. But strip away government contractors, and the familiar names in the IT 100, from phone giant Nokia Corp to dot-com auction champ eBay Inc, are settling into patterns that point to important trends in technology.

Two themes emerge in this midyear check on BusinessWeek’s best-performing tech companies (see BW, 6/24/02, for the original 2002 IT 100). First, in the industries most savaged by the downturn—the Internet and telecom—sturdy champions are emerging from the rubble. From travel site Expedia Inc to Spain’s Telefónica Móviles, these rising stars have growing clout in their industries, make real profits, and throw off lots of cash. The other trend, far less surprising, is that in the current tech slump, industry behemoths rule their roosts. That’s why Dell, Nokia, IBM, and Microsoft represent safe havens in today’s storm.

Each June, our survey ranks the world’s best 100 information technology companies by their revenues, sales growth, profitability, and stock appreciation. In the fall, we tally share performance during the previous six months. Following a punishing stock market ride, each of our eight sectors declined, and the whole list dropped 16.2%.

In this sinking market, Internet companies on the list fared better than the others, dropping only 4.4%. They’re winning with old-fashioned growth and profits. Two of the brightest stars are in travel. No. 26 Hotels.com is projected to boost sales 85% in 2002, to $992 million, and to rack up operating earnings of $80.6 million, a five-fold increase from last year, says Legg Mason Wood Walker Inc. analyst Thomas S Underwood. He also expects strong results for Expedia (No. 53), which is on track to hike its annual revenues by 98% and more than double profits. And both companies are expanding fast: Hotels.com’s sales are booming overseas, while Expedia is eyeing the corporate market.

The biggest dot-com star remains eBay. It’s a natural winner in a down market: hard-pressed users raise cash by selling baseball cards and old trumpets. And it has become a familiar rite for companies gone belly-up to unload their PCs and Cisco routers on eBay. Feeding this boom is a growing online population—and a growing trust in online transactions. EBay’s online marketplace now numbers 24.2 million active users, up from 13.2 million at the start of 2001. Gross sales per user have risen 14.6%, to $511. Next year, analysts expect revenues to rise 55%, to $1.8 billion, with net income climbing 49%, to $330 million.

"Our dream of becoming the commerce engine of the Internet is coming true," says chief executive officer Margaret C. Whitman.

In Europe, telecom players are on the comeback. The group of 27 on our list declined a mere 8.4% since April, not bad compared with the 21.1% plunge the Nasdaq took. The best performers: Europe’s fast-growing, cash-churning mobile-phone powers, which took 6 of the top 15 spots. Why the surge? Investors fled the sector two years ago, when telcos plunged into debt to buy the next generation mobile networks, known as Third Generation (3G). Many of these companies have worked down their debt, postponed 3G investments—and are raking in cash.

Among the brightest stars is Britain’s mm02 PLC, spun off from BT Group PLC last year. In the fiscal year ending Mar. 31, revenues are expected to grow 4% while spinning out a solid $925 million in operating cash flow, predicts Mark D James, an analyst at Nomura Securities International Inc in London. But for mm02 and other mobile players, there’s a catch. Earnings will dip as investment in 3G ratchets up. Future growth hinges on growth in mobile data, an unproven market.

The picture is far clearer for the tech titans on the list. Dell increased its global market share in PCs from 14.8% to 16% in the third quarter to retake the lead from Hewlett-Packard Co (No. 35), according to market researcher IDC. Now, it’s targeting HP’s cushy positions in printers and personal digital assistants. And smaller-fry tech players? Forget about them, says Barry Jaruzelski of consultancy Booz Allen Hamilton Inc: "Are you going to risk key pieces of your infrastructure to a company that may not be around?" Such are the grim calculations that separate winners from losers in today’s chilly tech market.

By Andrew Park in Dallas, with Andy Reinhardt in Paris