Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and International Business Machines Corp. (NYSE:IBM) both released their earnings reports for the first quarter of 2014 this afternoon. Both tech giants managed to disappoint their shareholders, and after-market trading saw the two firms lose substantial amounts of value.

Google stock GOOG GOOGL

At time of writing shares in International Business Machines Corp. (NYSE:IBM) had fallen by around 4% while losses in Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) shares were greater than 5%. After a relatively strong day for the Nasdaq, which gained more than 1% on Wednesday’s market, it appears that tech stocks are ready to take another hammering, despite the promises of Tuesday afternoon.

Google misses on key metrics

Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) showed several weak numbers in its summary of the first financial quarter of 2014. The company’s ad pricing continued to weaken, and earnings came in below the expectations of analysts. Google showed earnings of $6.27 per share on revenue totaling $15.42 billion. Analysts were expecting the company to show earnings of $6.40 on revenue of $5.52 billion.

Google’s cost-per-click fell by 9% year on year in the first quarter, and indicate that the company’s advertising strength is still waning, despite the steps made toward mobile integration. Ad sales actually increased substantially year on year, however, with paid clicks up by around 26% from the same period in 2013.

While this afternoon’s earnings report may be disappointing, and it certainly demonstrates some of the weaknesses of the Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) business model, it is by no means a strong negative for Google. The amount of growth built into the firm’s shares means that any disappointment is amplified. Since the beginning of the year the company’s shares have lost around 5% of their value, but in the last twelve months the firm has gained around 40%. International Business Machines Corp. (NYSE:IBM) is in a different position, however.

International Business Machines Decline looks worrying

Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) may be simply cutting a little off of very high expectations, but International Business Machines Corp. (NYSE:IBM) does not quite have the same room to maneuver. The company showed earnings of $2.54 per share, in line with analyst estimates. Revenue came in at $22.48 billion. That was $500 million below the expectations of Wall Street.

The current strategy at International Business Machines Corp. (NYSE:IBM) appears to be able to hold the line in hardware as much as possible while expanding its software and services businesses. That model isn’t bad for a company in the midst of a turnaround, but it is disappointing to investors. The firm has been promising growth in the area for a long time, and the turnaround just isn’t happening.

Shares in International Business Machines Corp. (NYSE:IBM) have been stagnant since the beginning of 2012 despite massive growth in the wider market. The turnaround of the server maker is frustrating investors, and that’s caused another exodus in the wake of today’s release.