The technology stock boom of the last decade is over now, according to Bernstein. After outperforming by 8.6% on average every year for the previous eight years, tech performance reversed dramatically in 2022. Tech companies’ valuations are elevated, while expectations for growth are modest. That could mean tech is entering a new period of tepid growth, Toni Sacconaghi, senior research analyst at Bernstein, said in a note Monday. “We worry that relative stock performance for tech over the next several years risks being more muted, akin to the lost decade following the tech bubble bursting,” he said. “Importantly, we believe that stock picking within tech will likely matter much more over the next five years, and, it may take a new set of tech leaders to emerge to drive tech’s next big rally.” Tech stocks are expected to grow earnings more slowly than the broader market this year. Over the next five years, tech is forecast to see faster earnings than the rest of the market, but not as fast as its historical average, according to Bernstein. Sacconaghi noted that in 2004, even with contractions in tech valuations and earnings growth outlooks similar to today’s, the sector underperformed in seven of the following 10 years, and by 9% for the full period. The biggest names in tech today – Meta , Amazon , Apple , Microsoft , and Alphabet – account for 50% of tech’s total market cap and accounted for 73% of tech’s cap-weighted outperformance between 2014 and 2021. Their outlook for sustained growth will continue to drive tech sector performance, although growth expectations for the five are expected to slow “materially” in the next two years, Sacconaghi said. But as in the “lost decade,” the market found fresh leaders to drive the next big rally in tech and it may need to do so again in this new period, Sacconaghi said. “A key driver of tech’s underperformance in the 2004-2013 timeframe was driven by weakness among the largest tech stocks at that time – Microsoft, IBM, Intel, Cisco and Dell – amid the ending of the PC era and the emergence of smartphones and cloud,” he said. “And it took time for a new era of tech leaders to emerge.” —CNBC’s Michael Bloom contributed reporting.