How low can some tech stocks go?

SAN FRANCISCO — A large and growing number of large-cap technology stocks have either hit new 52-week lows this week or are trading near those prices.

The bearish trading suggests the rising tide of optimism that's lifted all but the leakiest boats in this long bull market has either ebbed or paused – just in time for tech earnings season.

On Tuesday, shares of e-commerce giant Alibaba, No. 1 smartphone-chip maker Qualcomm and the two largest makers of PC and server chips – Intel and Advanced Micro Devices – hit their lowest prices in at least a year.

Meanwhile, No. 1 chip-equipment maker Applied Materials traded within 1% of its 52-week low.

That means nine of the 40 most-valuable tech firms, or nearly a quarter of the total, have shares priced at or within 5% of such lows.

By contrast, only four of those 40 stocks — namely Facebook, Amazon, AT&T and eBay — are within 5% of their 52-week highs.

That's a roughly two-to-one bearish ratio just as most of the largest tech companies get set to release quarterly results this month.

As the six-year U.S. economic recovery begins to separate winners from losers, the trading of tech shares is looking more and more like a stock-picker's market.

Alibaba shares plumbed their new intraday low of $76.21 on a day of heavy-trading volume.

The stock has now fallen by 36% since hitting a high of $120 last November.

That the Chinese Internet company made the list won't be a big surprise to those who remember that Alibaba executed the largest tech IPO on record in September.

Initial public offerings create an artificial shortage of shares just when demand for them is hottest.

That usually helps drive the stock price higher — but not indefinitely.

As we noted here in March, a huge number of Alibaba shares are now coming available for sale as IPO-related restrictions expire for company insiders.

In three months, Alibaba's largest shareholders — Softbank, Yahoo and long-time executives Jack Ma and Joseph Tsai — can all begin selling their IPO shares.

Those investors owned more than half the company's shares at the time of the IPO.

While all that is helping to depress Alibaba's share price, a more troubling development for the broader tech market is the growing number of marquee chip names trading at or near 52-week lows.

That's because the health of the chip sector is a leading indicator for the tech industry as a whole.

Before Apple or Samsung Electronics can make a smartphone or Hewlett-Packard or Lenovo can sell a laptop or Cisco Systems can build an Internet switch, they all must buy various kinds of computer chips to run their hardware.

Those kinds of huge orders are routinely placed at least six months in advance.

So if tech investors are souring on the business at Intel, AMD and Qualcomm halfway into 2015, it could signal disappointing financial news later this year for a broad range of tech companies.

What's more, even before chip makers get their orders, they have to buy equipment from companies such as Applied Materials, the largest maker of these expensive fabricating machines.

On Tuesday, Applied's shares traded within 10 cents of their 52-week low of $18.63.

Veteran traders like to say "the trend is your friend."

We'll know a lot more about the prospects for tech in the second half after most large firms update their forecasts this month.

Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek,The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others. Follow him on Twitter: @johnshinal.