Microsoft and Alphabet shed combined $42 billion

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Investors betting on a continued rally in shares of Alphabet and Microsoft are having a rough afternoon.

The two tech giants reported results that trailed analysts' estimates, sending the shares tumbling in extended trading and shedding a combined $42 billion in market value. Alphabet plunged 4.9 percent to $741.94 while Microsoft dropped 3.6 percent to $53.80.

Expectations coming in were sky high, with Alphabet's core Google ad unit ramping up its YouTube and mobile ad business and Microsoft's cloud-computing products gathering momentum. Investors have piled into the stocks, lifting Alphabet 44 percent and Microsoft 31 percent over the past 12 months as of Thursday's market close.

Alphabet said first-quarter revenue increased 17 percent to $20.26 billion, trailing the $20.37 billion average analyst estimate, according to Thomson Reuters. Adjusted earnings per share of $7.50 compared with estimates of $7.97. Microsoft's fiscal third-quarter revenue of $22.08 billion and EPS of 62 cents fell slightly short of estimates.