A technology stack significantly impacts software development by influencing how applications are built, maintained, and scaled. A typical stack includes layers like the frontend for user interface and the backend for server-side logic, with databases and middleware as additional components. The choice of programming languages, frameworks, and tools within the stack dictates development speed, compatibility, and performance. It also affects team expertise, project complexity, and ultimately the end-user experience, emphasizing the importance of selecting an appropriate stack for project success.