# Tesla and Alphabet Report Blowout Quarters

**Published:** 2026-07-23T17:57:05.225Z  
**Topic:** Tesla  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/3b4ddca2-dcaa-4660-9480-102b7ee6ac75

Tesla and Alphabet report strong earnings, but stocks fall due to AI spending concerns, with Tesla's operating margin collapsing to 1.4% and Alphabet's capex

Tesla and Alphabet, two of the market's most-watched companies, reported blowout quarters on the same night, yet both stocks sold off anyway, with Tesla beating revenue by 7.10% but missing EPS by 38.51%, and Alphabet crushing EPS by 199.41% [1]. The stakes are high, as these earnings reports reveal the impact of AI spending on the tech industry, with investors spooked by the ever-increasing amounts of money being spent on artificial intelligence [4].

| At a glance | |
|---|---|
| Tesla Revenue | $28.24 billion, up 25.52% YoY |
| Alphabet EPS | 199.41% above expectations |
| Nebius Revenue | $399 million, up 684% YoY |

## Earnings Report
The earnings reports showed a mixed picture, with Tesla posting record deliveries of 480,126 vehicles, but its operating margin collapsing to 1.4% and free cash flow flipping to negative $1.09 billion [1]. Alphabet's Q2 revenue reached $119.80 billion, up 24.23% YoY, but its capex reached $44.92 billion, and the company suspended its buyback program [1]. Nebius, another AI company, reported a blowout quarter with revenue surging 684% YoY to $399 million, and a $27 billion contract with Meta Platforms [2].

## Competitive Picture
The competitive picture is intense, with Alphabet's Google Cloud backlog reaching $514 billion, up from $490 billion the prior quarter, and its operating income more than tripling to $8.8 billion [3]. Tesla's robotaxi economics and Alphabet's Cloud growth are key areas to watch, as they will drive the companies' future performance. The companies' valuations are also under scrutiny, with Tesla trading at a trailing multiple of 344, and Alphabet at 26 [1].

## What to watch
* Tesla's next earnings report, which will reveal if the company can improve its operating margin and free cash flow
* Alphabet's Cloud growth, which will be crucial to the company's future performance
* Nebius's execution on its contracted power buildouts and digestion of recent acquisitions, which will determine the company's future success

The significance of these earnings reports lies in their revelation of the impact of AI spending on the tech industry, with investors increasingly concerned about the high costs and uncertain returns of these investments. As the tech industry continues to evolve, one key question remains: can these companies balance their AI spending with profitability and growth?

## Sources
1. 247wallst.com — [Two Blowout Quarters, Two Selloffs: What Tesla and Alphabet Reveal About our...](https://247wallst.com/investing/2026/07/23/two-blowout-quarters-two-selloffs-what-tesla-and-alphabet-reveal-about-our-price-target/)
2. AOL — [Nebius Soars 20% on Blowout Quarter: 684% Revenue Surge, NVIDIA Backing, Meta Megadeal](https://www.aol.com/articles/nebius-soars-20-blowout-quarter-184021000.html)
3. Benzinga — [Google’s AI Waitlist Just Hit $514 Billion. That’s Bigger Than the GDP of Most C...](https://www.benzinga.com/markets/tech/26/07/60638322/alphabet-google-cloud-514-billion-backlog-bigger-than-many-countries-gdp)
4. BBC — [Google and Tesla shares plunge as AI spending rattles markets](https://www.bbc.com/news/articles/c235n47g8g8o)

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Cite as: TrendWatcher, "Tesla and Alphabet Report Blowout Quarters", https://www.trendwatcher.in/article/3b4ddca2-dcaa-4660-9480-102b7ee6ac75