Shares of Alphabet dropped 9.1%. The Google parent missed top and bottom lines while also reporting a decline in advertising revenue. Online ad sales have been a hot topic among investors and analysts watching the tech sector.
Microsoft was down 7.7% after reporting weaker-than-expected cloud revenue, making investors jittery even as the company beat revenue estimates. The company also issued current-quarter revenue guidance short of expectations.
"Investors probably were caught a little by surprise by the negative guidance offered by Microsoft," said Sam Stovall, chief investment strategist at CFRA. On the other hand, he said investors were "more prepared for continued weakness" from Alphabet.
Big Tech is the centerpiece of earnings this week, with others including Apple and Amazon set to report.
Stovall pointed out that tech is not representative of how companies have fared overall in this reporting season. He pointed to Coca-Cola and UPS, which both performed better than anticipated in his view.
"I think investors are feeling a little bit better about the more large-cap, blue-chip stocks," he said.
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