The Big Tech earnings split is wide open: Alphabet posts record Cloud growth, but a jumbo spending plan has investors uneasy heading into tonight's session.
Wall Street closed slightly lower on Wednesday, pressured by rising oil and a two-month-high 10-year Treasury yield as traders braced for megacap tech earnings.
Alphabet (GOOGL) stole the show. Q2 revenue jumped 24% to $119.8B, powered by Google Cloud rocketing 82% to $24.8B. But a record capital-spending plan turned the focus to the cost, not just the growth.
Foundry losses, AI-PC roadmap, guidance after turnaround pressure
Tonight's Catalysts 🧨
Alphabet earnings: Cloud explodes, capex takes center stage
Alphabet posted $119.8B in revenue (up 24% YoY), with Google Cloud up 82% to $24.8B and Cloud operating margin more than tripling to 35.6%. But quarterly capex hit a record $44.9B, and full-year guidance was lifted to $195-205B from $180-190B. Free cash flow swung to -$5.9B, and GOOGL fell after hours as investors weighed the cost of the AI race.
Tesla: record revenue, but margins disappoint
Tesla delivered record revenue of $28.24B (up 26% YoY) on roughly 480,000 record deliveries, but profitability missed. Adjusted EPS of $0.33 came in well below the $0.51 expected, and automotive gross margin sat at 16.9% (16.3% excluding regulatory credits). Operating expenses rose 47% and capex jumped 142% to $5.79B on AI infrastructure. TSLA fell about 3% after hours.
Intel reports post-market tonight, the next sentiment test for the chip sector. The macro backdrop is unfriendly: Brent crude is back above $94 on geopolitical tension and the 10-year Treasury yield sits at a two-month high, pressuring risk assets into the session.
Pre-Market Pulse 📊
US futures traded cautiously after a mixed round of after-hours earnings. Beyond the watchlist, Super Micro (SMCI) surged 26% in Wednesday's regular session on a record order backlog, reinforcing the AI-infrastructure demand story, while AT&T (T) topped EPS estimates to rank among the strongest large-cap movers.
Macro Note 📝
Rising oil and climbing yields are the main headwinds tonight. If energy-driven inflation pressure persists, rate-cut expectations could shift, and high-valuation growth stocks are usually the first to feel it.
Conclusion
Tonight's Big Tech prints tell two sides of the same coin: the AI growth is real (Alphabet Cloud +82%, Super Micro's record backlog), but so is the cost (Alphabet's $195-205B capex plan, negative free cash flow). The market is deciding which shows up first, the returns or the bill.
For anyone watching these names, tonight is about discipline: wait for direction from Intel's print and the regular-session reaction in GOOGL and TSLA before adding to positions. What stocks are you watching tonight?
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