Meta (META) and Microsoft (MSFT) stocks tumbled Thursday as investors weighed the tech giants' hefty, ever-increasing AI bills.

Meta fell over 4%, while Microsoft was down over 5% in midday trading. During their quarterly earnings reports the night before, both companies beat Wall Street’s expectations on earnings and revenue, but investors appeared spooked as executives said in calls with investors that they expect capital expenditures to continue increasing.

The mood also weighed on other Big Tech names, including Amazon (AMZN) and Apple (AAPL), which are set to wrap up megacaps' earnings week on Thursday. AI darling Nvidia (NVDA) also stumbled, with its stock down over 4%.

Those capital expenditures have in recent quarter been largely driven by Big Tech companies' investments in generative artificial intelligence infrastructure, such as AI chips. Microsoft’s capital expenditures nearly doubled from the year-ago period to $20 billion during its 2025 fiscal first quarter, while Meta’s expenses rose 36% to $9.2 billion over the same period (its 2024 fiscal third quarter).

Meta raised the lower end of its guidance range for full-year capital expenditures from $37 billion to $38 billion, and Chief Financial Officer Susan Li said the company expects "significant capital expenditure growth in 2025."

For its part, Microsoft Chief Financial Officer Amy Hood said the company expects capital expenditures to increase in the current quarter as the company ramps up investments in AI hardware in response to "AI demand signals," which she said will weigh on its gross margins. The company gave a weaker-than-expected sales outlook for its fiscal second quarter (the current period).

Microsoft's softer second quarter outlook came in part due to capacity constraints, as it faces delayed deliveries of AI chips to power data centers on which it runs its AI software, rather than any slowdown in demand, analysts noted.

While investors have expressed concerns about a disconnect between Big Tech firms' AI spending and actual demand from consumers for its AI products, both Microsoft and Meta signaled that demand is real, and Wall Street analysts largely agreed.

Meta said it’s seeing "rapid adoption of Meta AI."

"We are very optimistic about the set of opportunities in front of us and believe that investing now in both infrastructure and talent will not only accelerate our progress, but increase the likelihood of maximizing returns within each area," Li said.

Microsoft's Hood noted that its motivation for AI spending is linked to “growing demand” for its AI products in the present, and she expects Microsoft’s cloud division sales to accelerate in the second half of its fiscal year 2025 as it “capital investments create an increase in available AI capacity.”