With profits falling in this late stage of the economic recovery, longer-term returns on technology stocks will likely be subpar, Richard Bernstein Advisors warned in a research note Thursday.

“Our forecast is that the S&P 500 GAAP profits growth will slow from roughly 23 percent in 2018 to zero to five percent in 2019,” Bernstein said. “If that forecast proves correct, then technology has a high probability of underperforming.”

Bernstein, which manages about $9 billion as a subadvisor and SMA manager, lowered its tech exposure at the beginning of the year from about 26 percent to 11 percent.

“Technology has historically been among the most cyclical sectors, and tends to underperform when profits cycles decelerate,” the firm said.

Returns are also lowest when an abundance of capital is chasing a hot sector, the firm said, noting that flows into venture capital funds have tripled since the beginning of the bull market, and that investors are now putting more money into individual tech stocks than tech ETFs.

“It’s ironic that active management is under pressure yet individuals have increasing confidence in their own abilities to pick technology stocks,” Bernstein said.

Also worrisome is the fact that 10-year rolling returns for technology industries “are starting to seem extreme,” the firm said. The rolling average returns since June 1975 of hardware and semiconductor stocks are now in the highest quintile of historical returns, and software’s return is in the second highest.

“It’s apparent that investors initiating technology investments today are doing so more toward the end of a normal return cycle than toward the beginning,” Bernstein said.