Google Tesla Q2 earnings: more polarized than I expected
🟢 Alphabet｜Beat expectations, but the market isn’t buying it
$GOOGL
Revenue beat expectations, and its cloud business grew 82% year over year—this is a standout for any company. Profits also jumped significantly, so logically it should have risen.
But it dipped in after-hours at one point. The reason: capital expenditures surged, with essentially all of it going into building AI data centers. The market is basically solving this question: money is going out—when will the returns come?
My personal view is bullish, but the pace should slow down. Cloud growth of 82% indicates that AI monetization is already being realized in the real world, not just a PowerPoint story. The problem with high capex is fundamentally the market’s concern about near-term profits, not a rejection of the long-term thesis. If cloud growth can hold up in the following quarters, this after-hours drop may actually be an opportunity window.
🔴 Tesla｜Mixed signals, near-term pressure
$TSLA
Revenue of $28.2B beat expectations, so on the surface it looks okay. But the reality: EPS at $0.33 missed expectations, gross margin declined, and free cash flow turned negative.
Where did the money go?
AI infrastructure, Cybercab, and investments in Optimus production. The direction is right, but it’s still a burn-money phase—monetization is still early.
FSD subscriptions and energy storage growth are indeed impressive—these are the two parts I care about most. If these two lines can keep propping up performance over the next few quarters, Tesla’s valuation logic could shift from an automaker to an AI/energy company. But right now, the valuation still relies heavily on selling cars, which creates significant pressure.
I’m neutral to cautiously minded on Tesla. I’ll wait until the Cybercab production timeline is clearer.
Both companies’ earnings suggest that the money invested in AI has already been spent, and the validation period is only just starting. Google’s cloud business is beginning to recoup, while Tesla is still burning. That gap is something the market will continue to price in.
DYOR—not investment advice
🟢 Alphabet｜Beat expectations, but the market isn’t buying it
$GOOGL
Revenue beat expectations, and its cloud business grew 82% year over year—this is a standout for any company. Profits also jumped significantly, so logically it should have risen.
But it dipped in after-hours at one point. The reason: capital expenditures surged, with essentially all of it going into building AI data centers. The market is basically solving this question: money is going out—when will the returns come?
My personal view is bullish, but the pace should slow down. Cloud growth of 82% indicates that AI monetization is already being realized in the real world, not just a PowerPoint story. The problem with high capex is fundamentally the market’s concern about near-term profits, not a rejection of the long-term thesis. If cloud growth can hold up in the following quarters, this after-hours drop may actually be an opportunity window.
🔴 Tesla｜Mixed signals, near-term pressure
$TSLA
Revenue of $28.2B beat expectations, so on the surface it looks okay. But the reality: EPS at $0.33 missed expectations, gross margin declined, and free cash flow turned negative.
Where did the money go?
AI infrastructure, Cybercab, and investments in Optimus production. The direction is right, but it’s still a burn-money phase—monetization is still early.
FSD subscriptions and energy storage growth are indeed impressive—these are the two parts I care about most. If these two lines can keep propping up performance over the next few quarters, Tesla’s valuation logic could shift from an automaker to an AI/energy company. But right now, the valuation still relies heavily on selling cars, which creates significant pressure.
I’m neutral to cautiously minded on Tesla. I’ll wait until the Cybercab production timeline is clearer.
Both companies’ earnings suggest that the money invested in AI has already been spent, and the validation period is only just starting. Google’s cloud business is beginning to recoup, while Tesla is still burning. That gap is something the market will continue to price in.
DYOR—not investment advice