Tesla and Alphabet drag mega-cap AI lower on earnings; profit miss meets capex shock, Nasdaq -2.2 pct

Tesla Inc. (NASDAQ: TSLA) plunged 14.5 pct and Alphabet Inc. (NASDAQ: GOOGL) fell 7.1 pct Thursday as two of the most closely watched quarterly reports in the AI era delivered the same unwelcome message: profits are being squeezed by the cost of building AI at scale. The S&P 500 lost 1.2 pct to 7,408, the Nasdaq Composite dropped 2.2 pct to 25,138, and the SOXX semiconductor ETF (SOXX) gave back 0.8 pct to 551.

Today's biggest movers

Tesla tumbles 14.5 pct on Q2 profit miss as margin pressure deepens

Tesla Inc. closed at $319.69, its worst single-session percentage loss in more than a year, after reporting second-quarter results Wednesday evening that laid bare the conflict at the heart of the company's current phase: record vehicle deliveries coexisting with collapsing profitability. Revenue for the quarter came in at $28.24 billion, well ahead of the $25.71 billion analyst consensus, but adjusted earnings per share of $0.33 fell sharply below the $0.47 to $0.51 range that Wall Street expected. GAAP operating income dropped 57 pct year-over-year to $398 million, with operating margin narrowing to 1.4 pct. Operating expenses surged 47 pct while regulatory credit income fell 67 pct, stripping out two line items that had previously cushioned results.

Deliveries of 480,126 vehicles in the quarter were up 25 pct from a year earlier and came in roughly 74,000 units above analyst consensus, offering the clearest sign yet that demand is not the constraint. The constraint is cost. The stock is now down 27 pct year-to-date and has given back all of its January-April gains.

Alphabet drops 7.1 pct as $205 billion capex plan overshadows Cloud blowout

Alphabet Inc. delivered its 12th consecutive quarter of double-digit revenue growth Wednesday evening, posting $119.8 billion against a $117 billion consensus and reporting Google Cloud revenue that grew 82 pct year-over-year. Adjusted earnings per share came in at $9.11, comfortably ahead of consensus. Instead of a rally, GOOGL closed Thursday at $317.69, down 7.1 pct, on the single line item that has now become the defining tension for every mega-cap AI name: capital expenditure guidance for full-year 2026 was raised to $195 billion to $205 billion, up from the previous $180 billion to $190 billion range. The company spent $44.9 billion on capex in Q2 alone, a 100 pct year-over-year increase. Free cash flow is compressing at a time when investors are scrutinising returns on AI infrastructure across the entire sector. The stock is now up just 0.8 pct year-to-date, as the AI-spending anxiety markets had been bracing for ahead of these results proved well-founded.

The Alphabet result set a difficult tone for Amazon.com Inc. (NASDAQ: AMZN), which reports its own second-quarter figures on July 30 and has committed to $200 billion in full-year AI capex. Amazon fell 4.6 pct Thursday to $233.66 as investors worried that the AWS growth story will be overshadowed by the same cash-flow concerns. The company's trailing free cash flow collapsed 95 pct to $1.2 billion as quarterly capex alone hit $43.2 billion in Q1.

Super Micro extends record-orders rally on SpaceXAI data center win

Super Micro Computer Inc. (NASDAQ: SMCI) closed at $31.20, up 2.1 pct, extending the prior session's 19.8 pct surge that followed the company's preliminary fiscal fourth-quarter disclosure. Super Micro said it booked more than $60 billion in new orders during the quarter, pushing its backlog to record levels, and projected gross margin would reach 15 pct to 17 pct, nearly double prior guidance of 8.2 pct to 8.4 pct. Chief executive Charles Liang confirmed the company is co-building a gigawatt-scale AI data center for Elon Musk's SpaceXAI venture. The prior session's surge, covered in Wednesday's recap, brought the stock from below $26 to above $30; Thursday's follow-through confirms institutions are still building positions ahead of the full audited print on August 11.

Oracle touches 52-week low as AI backlog fails to offset free-cash-flow burn

Oracle Corp. (NYSE: ORCL) fell 4.6 pct to $120.04, touching its 52-week low and extending a decline of 38.7 pct year-to-date. The company's AI backlog has surged 363 pct to $638 billion in remaining performance obligations. But Oracle spent $56 billion in capital expenditure over the trailing twelve months, producing negative free cash flow of negative $24 billion, and investors are re-rating the stock accordingly. The pattern mirrors Alphabet: the AI infrastructure buildout is real, the backlog is real, and the cash bleed is also real. Oracle is now trading at levels last seen before the generative AI boom took hold.

Notable but quieter

Salesforce Inc. (NYSE: CRM) -3.7 pct to $156.93. Morgan Stanley downgraded the stock to Equal Weight from Overweight on July 20, and Thursday's broader enterprise software selloff compounded the pressure. CRM is now down 38.1 pct year-to-date.

Meta Platforms Inc. (NASDAQ: META) -3.4 pct to $606.10. The move looks like pre-earnings positioning rather than a fundamental signal. Meta reports July 29; the consensus calls for roughly $60 billion in revenue, and Business AI weekly conversations have risen from 1 million at the start of 2026 to 10 million today.

ServiceNow Inc. (NYSE: NOW) rallied approximately 6.1 pct after reporting second-quarter earnings that beat expectations. Revenue of $3.99 billion, subscription growth of 24.5 pct year-over-year, and non-GAAP operating margin approaching 30 pct. AI annual contract value crossed $1 billion, with the company raising its full-year subscription revenue guidance. ServiceNow was the clearest counterpoint to Thursday's prevailing narrative: expanding margins and AI revenue flowing through the income statement.

Intel Corp. (NASDAQ: INTC) closed down 2.3 pct to $100.23 during the session, then reported a blowout second quarter after the bell. Adjusted EPS came in at $0.42 against a $0.21 consensus; revenue of $16.1 billion beat the $14.42 billion estimate, Intel's fastest quarterly revenue growth since 2011. Data Center and AI revenue climbed 59 pct year-over-year. Q3 guidance of $15.8 billion to $16.8 billion also exceeded the $15.1 billion analyst estimate. Intel shares had already rallied sharply earlier this week in anticipation of the print; the after-hours move adds further fuel.

Applied Materials Inc. (NASDAQ: AMAT) +1.6 pct to $562.80 and Lam Research Corp. (NASDAQ: LRCX) +0.2 pct to $319.78 held modest gains, partially decoupling from the broader tech selloff. AMAT is up 109.3 pct year-to-date on sustained wafer fab equipment demand.

What to watch Friday and next week

Intel's after-hours blowout will be the immediate focus when markets open Friday. An EPS beat of $0.42 versus $0.21 expected is wide enough to generate a significant gap-up, though the degree will depend on how management frames its foundry progress on the call.

The calendar then turns to two high-stakes reports on July 29: Arm Holdings plc (NASDAQ: ARM), where supply constraints on the new AGI CPU architecture are already flagged as a limiting factor; and Meta Platforms, where investors will be watching for any update on AI infrastructure capex commitments in the wake of the Alphabet reaction. Amazon reports July 30, the Federal Open Market Committee meets July 28 to 29 with the market pricing a hold but hike odds edging to roughly 24 pct on persistent inflation signals.

Not investment advice.