(Reuters) -Shares in three of the “Magnificent Seven” companies with significant investments in artificial intelligence were mixed in after-hours trade on Wednesday after the mega caps released third quarter earnings.

Shares in Google-parent Alphabet rose 6.2% after the company beat Wall Street estimates for third-quarter revenue on Wednesday, as both its core advertising business and cloud computing unit showed steady growth.

The cloud services and AI giant raised its capital expenditure forecast for the year to between $91 billion and $93 billion, compared with the estimates of $80.67 billion.

But Microsoft fell 3.4% in extended trading even though the company reported blockbuster growth in its cloud-computing business that pushed its quarterly revenue past Wall Street estimates, showing businesses are still splurging on AI services despite fears of a bubble.

The results highlight the growing returns from Microsoft’s massive AI investments.

Shares in Meta fell more than 8% after it said it recorded a nearly $16 billion one-time charge in the third quarter related to U.S. President Donald Trump’s Big Beautiful Bill, and said its capital expenditure next year would be “notably larger” than in 2025.

Meta has been doubling down on AI, CEO Mark Zuckerberg has personally led an aggressive talent hiring spree and has said that the company would spend hundreds of billions of dollars to build several massive AI data centers for superintelligence.

COMMENTS:

MICHAEL ASHLEY SCHULMAN, CHIEF INVESTMENT OFFICER, RUNNING POINT CAPITAL, LOS ANGELES

“From a market perspective the earnings wave says the AI investments are being somewhat vindicated; they’re not wild hype anymore, but not fully matured either. From a geopolitical angle the tech sector isn’t just about widgets, it’s now about data wars, platform power, regulatory maneuvers, and global supply chain guts. And the investor in me says great results, but buckle up, because the real test is converting those massive outlays into steady predictable returns. AI is both overhyped and under penetrated, simultaneously a bubble and a base case depending on your time horizon. Machine as narrative velocity moves prices faster than cash flows can catch up, and the market algorithm rewards engagement over fundamentals. For boring detail: In aggregate the trio basically told us the artificial intelligence land grab is real and the shovels are very expensive, with Alphabet clearing the $100 billion quarter while lifting capital expenditures to feed cloud and search, Meta posting record sales but face-planting on a nearly sixteen billion dollar tax charge as it leans into a $70 to $72 billion build out, and Microsoft reaffirming that the enterprise cloud is the toll road of artificial intelligence with a fresh revenue beat and rapid Azure growth. Nonetheless, for all the good news out there, parts of the market are behaving more like a social network than a discounting machine as narrative velocity moves prices faster than cash flows can catch up, and the market algorithm rewards engagement over fundamentals.”