Shares in Meta Platforms and Microsoft both fell in after-hours trading despite strong Q3 earnings on Oct. 30, as executives reduced their earnings outlooks and forecast more spending on artificial intelligence.

Meta reported on Oct. 30 that its Q3 revenues were up 19% year-on-year to $40.6 billion and beat Wall Street estimates of $40.2 billion. Its earnings per share (EPS) came in at $6.03, beating estimates of $5.19.

Microsoft’s results showed revenue was up 16% from last year at $65.6 billion, beating estimates of $64.4 billion, alongside its EPS coming in at $3.30 — well above the $3.08 expectation.

The earnings came as the two companies and other American Big Tech players, Google, Apple and Amazon, all invested heavily in AI , launching new models or making new hardware to back the hot new tech.

This year, Meta rolled out Meta AI across its popular WhatsApp, Facebook and Instagram apps, leading founder and CEO Mark Zuckerberg to say that the firm “had a good quarter driven by AI progress.”

Meanwhile, Microsoft’s earnings were boosted by a 33% year-on-year growth in its AI-powered Azure business, beating expectations it would expand around 29%.

“Our AI business is on track to surpass an annual revenue run-rate of $10 billion next quarter, which will make it the fastest-growing business in our history to reach this milestone,” Microsoft CEO Satya Nadella said on an earnings call.

Still, the shares of both companies declined in after-hours trading on Oct. 30 after an initial jump.

META fell 3.18% from its $591.80 close to $573, while MFST dropped 3.71% from its $432.53 close to $416.50, per Google Finance data .

Meta (left) and Microsoft (right) shares both saw initial jumps after-hours before falling. Source: Google Finance

The outlooks seemingly spooked traders, as both companies signaled more big spending on AI to come with modest near-term results.

On the earnings call, Zuckerberg noted its AI investments would “continue to require serious infrastructure“ and he expected Meta would continue “significant” investment, though it hadn’t “decided on a final budget yet.”

Related: Meta is reportedly building its own AI-powered search engine

Financial chief Susan Li said it was focused on making Meta AI “as engaging and valuable a consumer experience as possible” and that “monetization opportunities will exist over time.”

Meta said its full-year capital expenditures should land between $38 billion and $40 billion and that it expected “significant capital expenditures growth in 2025.”

Meta shares also dropped as it missed expectations for daily active users — a core metric on the health of its business — which notched a 5% year-over-year jump to 3.29 billion on average, lower than an anticipated 3.31 billion.

Microsoft, meanwhile, said in its outlook for the current quarter that it expected its core AI offering, Azure, to grow between 31% and 32%, slightly down from the 33% posted last quarter.

It added that it expects revenue for this current quarter to land between $68.1 billion and $69.1 billion, below analyst expectations of $69.9 billion.

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