Move over oil. AI leader Alphabet's spending sends investors running - Detroit Free Press

What the report says

The Detroit Free Press, publishing a Benzinga market report, said investor concern over the cost of artificial intelligence infrastructure weighed heavily on Alphabet during the week ending July 24. The report said Alphabet’s second-quarter capital expenditures rose to $44.9 billion, about double the year-earlier level, and that management raised full-year spending guidance to a range of $195 billion to $205 billion while indicating spending could rise again in 2027.

According to the report, Alphabet’s free cash flow turned negative by $5.9 billion as spending on AI infrastructure outpaced cash generation. Shares fell 7.1%, described as the company’s worst day since May 2025, erasing nearly $300 billion in market value. Benzinga framed the reaction as part of a broader Wall Street reassessment of how much large technology companies must invest to remain competitive in AI.

The article said Tesla faced similar pressure, with shares down 20% for the week after quarterly results missed expectations. It reported adjusted earnings per share of $0.33 against an expected $0.53, an operating margin of 1.4%, and capital expenditures up 142% year over year to $5.8 billion, tied largely to AI, robotics and autonomous driving.

The market backdrop also included rising oil prices and geopolitical tensions. Benzinga reported Brent crude moved above $100 a barrel after attacks on Saudi oil tankers in the Red Sea and comments from President Donald Trump about Iran. The report said defense stocks and General Motors moved in the opposite direction, with GM rising after stronger guidance and continued earnings outperformance.