Valuations do change, but if you hold for the long term and you bought-in at a low price, it doesn't really matter that much.
I think that with technology stocks, the biggest danger is new technology eclipsing older technology. This is what happened to VTSS. Lou and crew were great at making great high speed GaAs ICs, but then SiGe came along, and then shortly thereafter VTSS couldn't give the stuff away and that's when Lou started storing the returns in his garage. "Channel-stuffing" was no substitute for actual sales. I'm still amazed that virtually everyone walked except Mody and the woman who cooperated with the government. Anyway...
Time is not on your side in a technology business. Moore's Law is slowing, and this usually heralds some technology change. Where will AMCC be when the music stops? They need to grow that top line sooner, rather than later.