Earnings season has reached its peak, and on Friday, the Nasdaq Composite (^IXIC 0.10%) didn't like what it saw from the latest reports of its most important constituents. As of 1 p.m. EDT, the Nasdaq was down 2.5%, doubling the declines in a couple of other prominent stock market benchmarks.

Investors got an onslaught of fundamental business information since the market closed late Thursday afternoon, and they got their chance today to trade on that news. The result was that Apple (AAPL 0.19%), Amazon (AMZN 3.01%), and Facebook (META 0.64%) all fell sharply, while only Alphabet (GOOGL 0.23%) (GOOG 0.28%) managed to gain ground.

3 reports that failed to live up to expectations

The biggest stock in the market, Apple, also saw the biggest decline, losing nearly 6% Friday afternoon. Apple's report showed what many had expected to see -- that sales of iPhones plunged as customers decided to hold off until the new iPhone 12 models were available. That wasn't entirely unexpected, but it nevertheless gave investors pause in considering the big run-up in the stock price in 2020.

Person with head in hands in front of computer with stock charts on it.

Image source: Getty Images.

Yet Apple actually had great results elsewhere. Revenue from services reached a new record, and Mac computer sales were also strong. Apple was able to overcome supply chain issues to deliver on those fronts, but even massive stock repurchases weren't enough to satisfy investors.

Meanwhile, Amazon did only slightly better, posting a 5% down move following the release of its third-quarter financial report. The drop came despite a 37% rise in revenue and a near tripling of earnings per share. Moreover, Amazon is excited about the fourth quarter's prospects, guiding for sales to rise between 28% and 38% for the key holiday season.

What's especially remarkable is that Amazon delivered those numbers even after moving its Prime Day event out of the quarter. This year, Prime Day will boost the holiday numbers, positioning Amazon for even more growth in its fourth-quarter report.

Finally, Facebook's share-price decline was in line with those of Apple and Amazon, falling more than 5%. After sluggish revenue growth in the first half of the year, Facebook hit the gas pedal in the third quarter, with revenue rising 22% year over year and daily active user counts across all of its properties rising 15% to 3.21 billion. Net income also climbed, posting a nearly 30% gain to $7.8 billion. Yet it still wasn't enough after a massive share-price move higher for the social media giant.

Learning your ABCs

Only Alphabet managed to wow investors. The stock climbed 4%.

Alphabet knocked its third-quarter report out of the park. Revenue was higher by 14%, topping investor expectations that were less than half as high. Earnings jumped almost 60% year over year. A return of advertising revenue was a key contributor to Alphabet's blowout quarter.

Just about all of Alphabet's businesses participated in the gains. Google search, YouTube videos, and the Google Cloud infrastructure division all managed to post gains, even facing the challenges of the COVID-19 pandemic.

Perhaps most importantly, Alphabet hadn't seen share-price gains of anything close to the magnitude of Apple, Amazon, and Facebook. It's too soon to say that any sort of value orientation is returning to the stock market, especially among tech stocks. However, today's moves in the Nasdaq's biggest stocks show that perhaps valuation does matter at least a little bit.