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Alphabet and Tesla Were Punished for Heavy Spending. IBM Already Took Its Hit a Week Earlier.
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All three show the same thing: spending money on AI is starting to hurt profits.
Revenue beat expectations, coming in at $28.24 billion versus $25.71 billion expected, up 26% from last year.
Is this one big story, AI spending is finally hurting Big Tech’s profits everywhere, or are these three separate problems that just happened to show up the same week?
Their issue is that they’re spending money faster than that demand turns into cash.
Alphabet and Tesla still need to prove their spending will eventually turn into real profit before investors trust them again.