Shares of Tesla and Alphabet fell as both companies signaled increased spending on artificial intelligence (AI), unnerving investors.
Tesla's stock dropped 12%, while Alphabet lost over 6%. These moves followed a 1.46% decline in Alphabet shares and a 1.3% drop in Tesla shares.
Both companies reported negative free cash flow for the second quarter. Alphabet raised its capital expenditure forecast for this year to $195 billion to $205 billion and warned of higher figures in 2027.
Tesla, meanwhile, reported that capital expenditures surged 142% year-on-year to $5.79 billion.
Management at Alphabet noted that the spending increase is primarily due to an acceleration in the delivery of capacity to meet growing demand.
Alphabet's cloud revenue jumped 82% to $24.8 billion, beating forecasts.
