Alphabet’s second-quarter earnings beat expectations, with the company investing $85 billion in artificial intelligence infrastructure this year. The investment is a significant boost to its previous forecast of $58.84 billion and represents a 16% increase from February estimates.
Google parent Alphabet reported a 32% jump in cloud revenue for the second quarter, driven by “strong and growing demand” for its Cloud products and services. Despite the increased spending, shares rose as much as 3% in extended trading, indicating investor confidence that AI investments can be properly monetized and translate into higher revenue.
In contrast, Tesla’s automotive revenue fell 16% year-over-year and overall revenue missed analyst estimates. The company’s shares dropped over 4% in extended trading.
The Nasdaq Composite closed above 21,000 for the first time, with major indices including the S&P 500 and Dow Jones Industrial Average also rising due to optimism over a potential US-Japan trade deal. However, information about the deal appears to have been altered, sparking concerns.
Meanwhile, investors are showing interest in “neocloud” companies, which specialize in artificial intelligence cloud computing. These firms offer cost-effective solutions for clients but come with risks.
In other news, China’s economy is facing deflationary pressures and requires more than just short-term stimulus. The country’s five-year plan emphasizes tech innovation, but institutional reform is equally important to exert greater control over the economy.
Source: https://www.cnbc.com/2025/07/24/cnbc-daily-open-investors-seem-confident-of-alphabets-increased-spending.html