Tesla, Alphabet shed $500 billion as AI spending hits Wall Street
What's new: Tesla fell 14.5% and Alphabet 7.1% after both posted negative second-quarter free cash flow.
Tesla and Alphabet led a Wall Street sell-off Thursday after earnings sharpened investor concerns that surging AI spending is outrunning near-term returns. Tesla dropped 14.5% and Alphabet fell 7.1%, wiping out roughly $200 billion and $300 billion in market value, respectively. Both companies reported negative free cash flow for the second quarter. Alphabet raised its 2026 capital spending outlook to $195 billion to $205 billion, up from a prior $180 billion to $190 billion range, while Tesla said second-quarter capex jumped 142% from a year earlier to $5.79 billion and projected more than $25 billion this year. The Nasdaq opened down 1.73%, with oil prices and broader worries about inflation adding pressure.