Another technology giant that has seen its shares take a hit in recent trading is IBM. The company has received a lot of investor and media attention over the years for its multibillion-dollar share repurchase programs. At one point, it was the toast of Wall Street as it took large chunks of its profits and distributed them back to shareholders through those buybacks, in addition to dividend payments. These days, the company has been accused by some of using share repurchases to "engineer" growth in earnings per share.
The concept is fairly simple. Let's say a company makes $100 in profits a year. It has 100 shares of stock outstanding. That means that earnings per share, or EPS is $1 per share. Now imagine that the company engages in a stock buyback program and buys back 50 of those shares. Profits can stay static at $100 the following year, but since there are now only 50 shares outstanding, EPS has doubled to $2.
Companies that are more mature in their life cycle, such as IBM, often will choose to return a good portion of cash they generate to shareholders. According to an IBM spokesperson, over the course of the last decade, the company has returned $118 billion in such a fashion, with $26 billion of that in dividend payments and $92 billion through share repurchases.
Read More Fed bubble has burst, but don't worry!
However, the company has been accused by some of sacrificing future growth by not reinvesting back in the company. IBM points out that during that same decade span, it has invested more than $133 billion back into the company, either through capital expenditures, acquisitions or research and development.
So far this year, IBM has announced a $1 billion investment in its Watson cognitive computing program; another $1.2 billion for building up to 40 cloud computing centers around the world, and $3 billion in semiconductor R&D. Analysts have an average target price of $170.78, which implies just 4 percent upside from current levels. Just 14 percent of analysts polled by Factset have a buy or equivalent rating, while 75 percent rate it neutral, and 11 percent rate it sell.
So, this is a tale of two tech titans. On one end, there's Facebook. The poster child of next generation internet companies that are revolutionizing the way we consume and distribute information. At current levels, the company is worth $197 billion and trades at 72 times earnings according to data from Factset. On the other end, there's IBM. One of the most iconic companies in American history. One that's reinvented itself at different times to adapt to an ever changing environment. It's worth $162 billion and trades at 13 times earnings.
Read MoreAs Fed quits bonds, banks to step in
There's negativity regarding both companies, but for differing reasons that happen to be flip sides of the same coin. Some investors don't like the idea that Facebook will be ramping up spending in the coming year on projects that could add to future growth. At the same time, some investors don't like the idea that IBM is ramping up spending on share buybacks, arguing that the company should be investing more in future growth.
There are very few apples-to-apples comparisons to be made between the two companies. The investment thesis and business models of each are both very different as well. However, the similar reaction in share price due to Facebook's plan to boost expenses in order to grow businesses, and the perception that IBM isn't spending enough on future growth means that there's a dilemma brewing about the best use of cash.
Stocks of both companies are being weighed down because one is being perceived as spending too much on future growth, and one is being perceived as perhaps not spending enough. One question facing potential investors in both is what the optimal mix of reinvesting for growth versus returning capital to shareholders is? Another question is whether the weakness in either stock, or both represents a buying opportunity? The jury is still out.