In this Club Check-in, CNBC’s Paulina Likos and Zev Fima break down big tech’s massive artificial intelligence spending spree — debating whether these billion-dollar bets will drive long-term cost savings or weigh on near-term returns.

Mega-cap tech companies are shelling out billions of dollars to build out AI infrastructure. The big question we’re asking is whether all this heavy spending will eventually pay off in efficiency or if Wall Street is right to worry about how much they’re burning through in the short term.

Concerns about AI-stock valuations seeped into the market this week and slammed stocks.

Many major tech companies —including the three biggest clouds, Amazon, Microsoft, and Alphabet‘s Google — raised capital expenditure guidance this earnings season, sparking both investor optimism and concern.

Zev Fima, portfolio analyst for the Club, argued the spending is justified: “Too much focus on the short-term is what leads to falling behind in the long term.” CNBC reporter Paulina Likos pushed back, noting that “investors haven’t seen efficiency gains show up in returns yet.”

Watch the video above to see where the debate played out on whether AI investments are real productivity drivers or just expensive promises until proven otherwise.

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Affirm CEO Max Levchin said Friday that while the buy now, pay later firm isn’t seeing credit stress among federally employed borrowers due to the government shutdown, there are signs of a change in shopping habits.

“We are seeing a very subtle loss of interest in shopping just for that group, and a couple of basis points,” Levchin told CNBC’s “Squawk on the Street.”

At least 670,000 federal employees have been furloughed in the shutdown, and about 730,000 are working without pay, the Bipartisan Policy Center said this week.

Levchin said he’s closely watching employment data for signs of major disruptions, but the company is “capable” of adjusting credit standards when needed.

“Right now, things are just fine,” he said. “We’re not seeing any major disturbances at all.”

The federal funding lapse, which began Oct. 1, is the longest in U.S. history and has halted work across agencies with an impact beyond those who are government employees. The SNAP food benefit program, which serves 42 million Americans, has also been cut off.

The comments from Levchin followed a fiscal first-quarter earnings report that blew past Wall Street’s estimates. Affirm posted earnings of 23 cents per share on $933 million in revenue. Analysts polled by LSEG expected earnings of 11 cents per share on $883 million in sales.

Revenues climbed 34% from a year ago, while gross merchandise volumes jumped 42% to $10.8 billion from $7.6 billion a year ago. That surpassed Wall Street’s $10.38 billion estimate.

The fintech company, which went public in 2021, also lifted its full-year outlook, saying it now expects gross merchandise volume to hit $47.5 billion, versus prior guidance of $46 billion.

Affirm also said it renewed its partnership with Amazon through 2031. The company has also inked deals with the likes of Shopify and Apple in a competitive e-commerce landscape.

Long-time partner Walmart recently ditched Affirm for Swedish buy now, pay later firm Klarna, which went public in September after delaying its public offering due to market uncertainty caused by President Donald Trump‘s tariff plans. Worries of a pullback in discretionary spending due to tariffs ignited fears across the fintech sector.

Levchin said categories such as ticketing and travel have seen an uptick in interest, and consumer shopping remains strong. Active consumers grew to 24.1 million from 19.5 million a year ago.

“We’re every single day out there preaching the gospel of buy now, pay later being the better way to buy, and consumers are obviously responding,” he said.

Block shares fell 10% Friday after weak third-quarter earnings fell short of Wall Street expectations and showed slowing profit growth for the company’s Square service.

Here is how the company did compared with LSEG estimates:

• Earnings per share: 54 cents adjusted vs. 67 cents expected
• Revenue: $6.11 billion vs. $6.31 billion expected

Revenue for the quarter was up 2% over last year. The Jack Dorsey-founded firm’s shares have fallen 24% year to date.

Square’s gross payment volume was up 12% year over year, but gross profit growth for the point-of-sale service was only up 9% over a year ago, slowing from last quarter’s 11%.

The company attributed the slower growth to a processing partner change and lower-margin hardware sales.

“Our product and go-to-market strategies are working as we continued to gain profitable market share in our target verticals like food and beverage, with larger sellers, and outside the U.S.,” Chief Financial Officer Amrita Ahuja said on the earnings call.

Cash App’s gross profit growth fared much better at $1.62 billion, increasing 24% over a year ago with 58 million monthly transacting active users. The strength was driven by the service’s Cash App Borrow, Cash App Card, and Buy Now Pay Later.

Morgan Stanley analysts wrote that they were “encouraged by the pace of credit expansion at Cash App” and are focused on “whether credit expansion will ultimately produce better inflows” per active customer and increase direct deposit accounts.

Ahuja said gross profit was a bright spot for Block, as the company reported $2.66 billion in gross profit growth, up 18% over the prior year. FactSet expected $2.60 billion in gross profit for the quarter.

The company raised its full-year guidance to expect a $10.2 billion gross profit for 2025, increasing from last quarter’s projection of $10.2 billion.

Block reported net income of $461.54 million, or 74 cents per share, which was up significantly over a year ago when the company reported net income of $283.75 million, or 45 cents per share.

CNBC’s MacKenzie Sigalos contributed to this report.