Alphabet Falls 7%, Tesla Drops 14.5% on July 23 as Wall Street Punishes AI Capex

Alphabet and Tesla saw their shares decline sharply on July 23 following earnings reports that disclosed elevated capital expenditure and deteriorating free cash flow. Alphabet shares fell 7.13% to $317.69 despite exceeding revenue expectations, while Tesla dropped 14.52% to $319.69 after reporting its first negative free cash flow quarter in over two years.

Alphabet raised its 2026 capital expenditure guidance to $195–205 billion from a prior forecast of $180–190 billion, generating negative quarterly free cash flow of $5.9 billion. Tesla reported capital expenditure growth of 142% year-over-year to approximately $5.8 billion and guided for full-year spending exceeding $25 billion, roughly triple its 2025 capital expenditure.