TSLA misses Q2 EPS by $0.18; GOOGL falls on capex raise

Wednesday's session ran on two frequencies: a pair of mega-cap earnings reports that told opposite stories about big-tech spending, and a broad selloff in software and growth names that pulled both narratives together.

Alphabet beats, then falls on the capex line

$GOOG / $GOOGL reported Q2 earnings and revenue above analyst estimates, with cloud computing growth as the primary driver. Search revenue came in line with forecasts. Management raised its capital expenditure forecast — again — continuing a pattern of AI infrastructure spending that investors now treat as open-ended cost rather than a bounded build. The stock fell on the announcement. The underlying business posted its 12th consecutive quarter of revenue growth; the market's argument was with the price of the next twelve.

Tesla misses by $1.3 billion on the operating line

$TSLA reported Q2 adjusted EPS of $0.33 against the Street's $0.51 estimate — a gap of $0.18 per share. Operating profit came in $1.3 billion short of forecasts. EV margins were thin. Free cash flow was essentially zero. Delivery volume was strong, which is the most credible explanation for why the stock did not fall further — the demand narrative holds. The profitability narrative doesn't, and management's robotaxi commentary offered no near-term fix. Tesla filed Form 8-K the same day, attaching the full Q2 update.

Software and growth names sell off in bulk

$SPCX dropped 6.7%, the session's largest single-name decline. SpaceX has now traded below its $135 IPO price; Cathie Wood's ARK added $20.5 million to the position on the slide. $PLTR fell 6.1% ahead of its own earnings report, under pressure from its 90x earnings multiple, reported executive insider selling, and the broader risk-off tone in AI software. $COIN shed 5.5% after Chief Legal Officer Paul Grewal announced he will step down July 31. $CRM dropped 4.2% as the market returned to questioning a stock that has gone flat despite $63 billion in shareholder returns. $ADBE fell 3.9%; the stock is now 40% below its 52-week high, with investors unconvinced of an AI monetization timeline that management has stretched to 2027.

Macro

The 10-year Treasury yield sat at 4.63% (July 21 close). WTI crude settled at $84.38 (July 20 settlement). The VIX held at 17.1 — cautious rather than alarmed.

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Filings desk

A Johnson & Johnson ($JNJ) senior executive sold $5.8 million in company shares, the day's sole insider transaction to clear the materiality threshold.

What we set aside

Two filings were withheld because the underlying events occurred more than 36 hours before publication. One ticker — $BRK-B — was examined and produced nothing reportable within the window.

The desk is watching Palantir's earnings report, expected Thursday, which will test whether Wednesday's 6.1% pre-earnings decline was correctly priced or merely the start.