Google Tesla Q2 earnings: more divisive than I expected

🟢 Alphabet | Beat expectations, but the market isn’t buying it
$GOOGL
Revenue beat expectations: cloud business grew 82% year over year—this is a standout for any company. Profits also rose sharply; in theory, the stock should have climbed.
But it dipped in after-hours at one point. The reason: capital expenditures surged, with all of it going into AI data center construction. The market is essentially solving a question: money has been spent—when will the returns arrive?
My personal view is bullish, but the pace needs to slow down.
Cloud growth of 82% indicates that AI monetization is already landing in real life, not just a PPT story. The issue with heavy capex is, at its core, the market’s concern about short-term profits—not a denial of the long-term logic. If cloud growth rates can hold up in subsequent quarters, this after-hours drop could actually be an opportunity window.
🔴 Tesla | Mixed signals, short-term pressure
$TSLA
Revenue of $28.2B beat expectations, so on the surface it looks fine. But the substance is EPS of $0.33, which missed expectations; gross margin fell, and free cash flow turned negative.
Where did the money go?
AI infrastructure, Cybercab, and investment in Optimus production. The direction is right, but everything is in a money-burning stage—monetization is still early.
FSD subscriptions and energy storage growth are indeed impressive; these are the two areas I care most about. If these two lines can keep propping up the next few quarters, Tesla’s valuation logic shifting from an automaker to an AI/energy company could hold. But right now, the valuation is still propped up by selling cars, which puts a lot of pressure on it.
I’m neutral to slightly cautious on Tesla—I'll wait until the Cybercab production timeline is clearer before making a call.
What these two companies’ earnings reports show is that the money being put into AI has already gone out—the validation period is only just starting. Google’s cloud is starting to recover, while Tesla is still burning. This gap will keep being priced by the market.
DYOR Not investment advice