BlockBeats News, July 30th - The Big Seven in the US stock market entered a key window for earnings reports. As of July 29th EDT after-hours, Alphabet, Tesla, Microsoft, and Meta have reported, while Apple and Amazon will announce their earnings after hours on July 30th, and Nvidia will have to wait until August 26th to disclose its latest quarterly performance. The reported earnings show that AI capital expenditure continues to rise across the board, and the market is beginning to scrutinize more closely the return on investment, free cash flow, and growth sustainability.

Alphabet was the first to raise the market's alertness to AI spending. The company reported second-quarter revenue of $119.8 billion, a 24% year-on-year increase, with Google Cloud revenue of $24.8 billion, a significant 82% year-on-year increase, and an overall operating profit margin of 34%. However, the company's quarterly capital expenditure surged to $44.9 billion, free cash flow turned negative to -$5.9 billion, and it raised its 2026 capital expenditure guidance from $180 billion to $190 billion to $195 billion to $205 billion. The strong cloud business did not offset concerns about the deterioration of cash flow due to the increased spending, leading to pressure on the stock price after the earnings report.

Tesla faced more pressure on profit and cash flow. The company reported second-quarter revenue of $28.24 billion, a 26% year-on-year increase, with deliveries of 480,100 vehicles, a 25% year-on-year increase, and energy storage deployments of 13.5GWh, a 41% year-on-year increase. However, adjusted EPS was $0.33, below market expectations; operating profit fell 57% year-on-year to $398 million, and free cash flow was -$1.092 billion. The company expects capital expenditures to exceed $25 billion in 2026, investing in Robotaxi, Optimus, Dojo computing power, and manufacturing capacity, causing the market's patience for high investments in exchange for the future to wane.

Microsoft, on the other hand, provided a few positive examples. The company reported fourth-quarter revenue of $90 billion, an 18% year-on-year increase, with an EPS of $4.81, higher than expected; net profit of $35.8 billion, a 31% year-on-year increase. Microsoft Cloud revenue was $59.3 billion, a 27% year-on-year increase, with Azure growing by 43%, and Microsoft 365 Copilot paying users exceeding 30 million. The company's quarterly capital expenditure was about $41 billion, with no slowdown in AI and cloud infrastructure investment pace. Azure and Copilot have already provided a clearer path to monetization, leading to a relatively positive market response.

Meta's earnings report once again sparked controversy over AI spending. The company reported second-quarter revenue of $60.8 billion, a 28% year-on-year increase, with advertising revenue of approximately $59.36 billion, a 27% year-on-year increase; but EPS was $6.18, below market expectations, and net profit fell 14% year-on-year to $15.85 billion. Costs and expenses surged by 55% year-on-year to $42.03 billion, capital expenditure reached $31.08 billion, and free cash flow dropped from $8.55 billion in the same period last year to $784 million. The company adjusted its full-year capital expenditure guidance to $130 billion to $145 billion, with third-quarter revenue guidance showing a slowdown in growth, dampening post-market performance.

Next, Apple and Amazon will take the stage as the final two heavyweights this week. The market is looking to Apple for insights on iPhone performance, service revenue, AI advancements, and cost pressures; while Amazon's focus is on AWS growth, AI in the cloud demand, and whether capital expenditures will continue to rise. Although NVIDIA's earnings are not due until late August, it has already become a direct reflection of this capex cycle among big tech.

Overall, the trading theme for the earnings of the seven tech giants has shifted from AI investment scale to AI investment returns. Microsoft has temporarily proven that the cloud and AI can deliver visible revenue, while Alphabet, Meta, and Tesla are being asked to present stronger cash flow evidence. The upcoming earnings reports from Apple, Amazon, and NVIDIA will determine whether the AI capital expenditure anxiety will continue to spread or return to a growth narrative.