Apple’s second-quarter sales and profit topped analysts’ estimates, fuelled by strong demand for the iPhone and digital services, and its shares gained in after-hours trading.

But many of tech’s leaders are having trouble repeating past successes. Netflix in the first quarter of this year lost subscribers for the first time in a decade. Facebook predicted that its quarterly revenue might decline soon compared with 2021. It’s not shocking partly because last year was a weird one for Facebook, but a tech company’s revenue is not supposed to shrink.

Amazon projected sluggish second-quarter sales growth, prompting a 10 per cent plunge in its share price in after-hours trading, as the online retailer struggles to build off the dramatic gains it made early in the pandemic. Young tech companies, including the stock-trading app Robinhood this week, have announced layoffs as their investors want them to hunker down.

Nuanced reassessment

There has also been a more nuanced reassessment of the belief that the pandemic would turbocharge technology. Lots of retail sales shifted back to physical stores from the online shopping mania of 2020. It turns out that not everyone wants to Zoom all the time or ride Peloton bikes in their dining rooms. Businesses that panic-bought work-from-home technology in 2020 might not need any more for a while.

Twitter is emblematic of this period of unsteady ground. Maybe Elon Musk, who agreed to buy the company this week for $US44 billion, will help Twitter fulfil a potential that has always seemed just out of reach. Or maybe he’ll drive the company into the ground.

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And if there is a US recession, as some economic watchers are contemplating, all bets are off. The last time there was a prolonged global recession — putting aside the brief pandemic-related US downturn in early 2020 — technology was a pipsqueak relative to today. Many tech companies basking in success now have never lived through lean times.

Shaken faith

In a recent conversation with an experienced tech investor, who didn’t want to be named so he could speak more freely, he sketched out what a dark tech phase might look like, particularly for the companies that sell technology to businesses.

Businesses for the past decade have been pouring money into buying technology, mostly with few financial constraints. But if there is a recession, he imagined that executives would take a hard look at budgets and pare back unnecessary technology.

If that happens, tech companies that have assumed they would keep growing fast for a long time will be in for a rude awakening, this investor cautioned.

We’re not there yet. But the fact that investors are imagining nasty scenarios highlights a mood shift. The boom times in technology have been largely based on hard facts — more people have come online, more businesses have been desperate to modernise ahead of rivals, and investors have found few places other than tech to make good money.

But another foundation was the faith that the tech sector would continue to see uninterrupted expansion. Once that feeling wanes a little, it isn’t always easy to get it back.

This article originally appeared in The New York Times.