Since the dot-com bubble burst, the tech industry has been in consistent growth mode and outperformed other parts of the economy. This was even the case during the housing crash and the ensuing Great Recession when it was one of the first major components of the market to make new highs.

And, it is not absurd to say that a bulk of stock market gains is due to tech sector outperformance. More specifically, it can be attributed to the mega-cap tech stocks which became major components of indices and grew to sizes that seemed unimaginable just a decade ago.

It's interesting to look at how much U.S. indices have outperformed Europe and Japan over the last decade. But, if you strip out the $1 trillion+ tech companies, the difference is much more subtle.

However, every cycle eventually meets its demise. The Nasdaq (QQQ  ) falling into bear market territory and the crash in many of the premier growth stocks is one piece of evidence supporting this thesis. Then, there is inflation and rising rates which make high-multiple stocks unattractive especially when earnings are deteriorating. In the initial months following the stock market bottom in 2020, tech companies saw an incredible surge in earnings and growth that is now reversing in many cases.

Another reason to believe that the bullish cycle in tech is ending (or has ended) beyond just stock market performance is that we are finally seeing an end to the incredible hiring and generous packages offered to employees.

Some examples of recent tech layoffs include Carvana (CVNA  ), Robinhood (HOOD  ), Netflix (NFLX  ), and On Deck. Some major companies have instituted hiring freezes including Twitter (TWTR  ) and Meta (FB  ). And, nearly every tech company is shifting its strategy from a focus on growth at any cost to preserving and maximizing cash flow.

Of course, this has multiple implications. For one, less spending by these tech companies is likely to affect companies like Nvidia (NVDA  ) and other tech services companies. These are also major components of the stock market so a drop in them is likely to have larger implications.

To compare, there was a bear market in energy and material stocks from 2015 to 2016, but it didn't pull the stock market or economy into a recession or bear market. Because the tech industry has a bigger weight on the indices and economy, I believe it's more of a risk.