Microsoft and Meta have both reported earnings that exceeded forecasts, but their stocks have dropped due to investor concerns over rising capital expenditures driven by significant investments in artificial intelligence (AI). Microsoft disclosed a substantial increase in spending, reaching $20 billion in the first fiscal quarter, and plans to invest $10 billion in CoreWeave through 2030. Meta, led by CEO Mark Zuckerberg, is heavily investing in AI to enhance its ad targeting and content recommendation capabilities, despite a 3.5% drop in its stock price. The Nasdaq and S&P 500 indices have also been affected, with the Nasdaq sinking 2.5% amid a broader tech selloff. Microsoft's stock dropped 3.7%. Meta's Reality Labs division reported a significant operating loss of $4.4 billion in Q3, further contributing to investor caution. Analysts and investors are questioning the profitability and long-term returns of these AI investments, leading to a volatile market reaction. The tech giants are projected to spend $200 billion this year on AI advancements.