Western Digital’s better-than-expected results and outlook failed to impress investors, as questions linger over the durability of artificial intelligence spending.

The memory storage company more than tripled capital spending in the fiscal first quarter as it invested in the production of higher-capacity disk drives, contributing to a roughly three percentage point contraction in free cash flow margin, Western Digital Beat, Raised View Signal Demand, Pricing: React Bloomberg Intelligence.

Shares rose right after results before dropping. The stock was down 5.3% in extended trading. Its peers also dropped with Seagate down 3%, SanDisk down 2%, Micron down 1%.

Memory stocks and other companies linked to the AI trade have been under pressure as concerns mount that heavy spending on data centers and computing capacity may take longer to pay off.

The issue remains “whether the data center spending momentum can continue at the current pace (and whether the huge backlogs can be translated into actual revenue),” Vital Knowledge wrote in a post-earnings note.

The company expects capital expenditure to average about 4% to 6% of revenue over five years, though spending will be “modestly” higher over the next two, Chief Financial Officer Kris Sennesael said on Thursday’s earnings call.

Concerns over spending and its impact on margin overshadowed first-quarter results and a second-quarter outlook that came in above expectations.

Western Digital forecast adjusted earnings per share of as much as $6 in its fiscal second quarter, well above the $4.80 analyst estimate. The hard-drive maker also raised its quarterly dividend by 17%.