# Tesla and Alphabet shares drop amid AI spending concerns Investors spooked by rising artificial intelligence costs. - **Source:** [US Top News and Analysis](https://brifing.si/source/635540e9-943e-450d-ae52-ae0bfe3b67eb) - **Published:** 2026-07-23 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/bcf44c43-f3db-4064-90fa-d2bc9ea5505e ## AI spending shock at tech giants Tesla and Alphabet shares tumbled in premarket trading after both companies signaled increased AI investments. Alphabet shares dropped 4% while Tesla fell over 5% as investors grew wary of mounting costs in the artificial intelligence race. ## Record surge in capital expenditures Alphabet raised its 2025 capex forecast to $195-$205 billion. Tesla's Q2 investments soared 142% year-over-year to $5.79 billion, with full-year spending expected to exceed $25 billion. The spending hikes came despite negative free cash flow. ## Management tries to calm investors Elon Musk expressed confidence that current investments would yield 'the best capex returns we've ever seen.' Alphabet's Sundar Pichai defended spending increases as necessary to meet growing demand for AI computing capacity. ## Optimus and semiconductor investments Tesla announced it's installing first-generation production lines for its Optimus humanoid robot and ramping up semiconductor manufacturing investments. These ambitious projects contributed to the company's negative cash flow position. ## Bright spots in cloud and automotive Google Cloud revenue jumped 82% to $24.8 billion, beating estimates. Tesla's core automotive revenue grew 23% year-over-year. However, these strong performances were overshadowed by concerns over the companies' massive spending plans. ## The cost of the AI arms race The AI competition among tech giants is dividing investors. Markets torn between short-term profitability concerns and long-term growth potential are watching closely for balanced growth strategies from industry leaders. ## Sources covering this story - https://www.cnbc.com/2026/07/23/tesla-tsla-alphabet-googl-stock-today.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._