Alphabet beat on revenue and lifted AI spending to as much as $205 billion. Tesla posted record revenue but saw margins fall to 1.4%. Brent crude climbed above $94 after an eleventh straight night of U.S. strikes on Iran. Intel reports after today's close.
Thursday opens with investors deciding which AI earnings story matters most.
Alphabet (GOOGL) beat revenue estimates and posted record net income. Much of the profit came from gains on its Anthropic and SpaceX (SPCX) investments. Excluding those gains, earnings missed expectations by a penny.
The bigger surprise was spending.
Alphabet raised 2026 capital spending guidance to $195 billion to $205 billion, up from $180 billion to $190 billion just one quarter ago. Shares fell as much as 3% after hours.
Tesla (TSLA) delivered the opposite result.
Revenue rose 26% to a record $28.2 billion as deliveries reached 480,126 vehicles. Operating margin fell to 1.4% from 4.1% a year ago as spending on robotaxis, Optimus, AI infrastructure, and manufacturing outweighed the recovery in vehicle sales. Shares dropped more than 4%.
Asia focused on future demand.
South Korea's Kospi rose 2.8%. Samsung Electronics and SK Hynix each gained more than 3% as investors bet higher AI spending means more chip orders. Nasdaq 100 futures recovered after early losses.
Intel (INTC) reports after the close.
The Signal
Alphabet increased spending. Tesla showed what that spending costs. Intel now has to show who earns the revenue.
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Oil gave the market its clearest message.
Brent climbed above $94 while WTI rose more than 4% to $87.99 after the United States carried out an eleventh straight night of strikes on Iran.
The Houthis also threatened more attacks on shipping through the Red Sea and Bab el-Mandeb Strait.
Another risk is growing outside the Gulf.
Drone strikes have hit the Caspian Pipeline Consortium terminal five times this month, threatening about 1.5 million barrels per day of Kazakh and Russian exports.
Gold climbed to a two-week high near $4,125 an ounce.
Energy Signal
Hormuz and the Caspian are now creating two separate risks for oil. Solving one does not solve the other.
Oil has changed the Fed conversation.
Markets now price about a 34% chance of a July rate hike, up from 10% one week ago. The probability of at least one hike by September is now close to 78%.
The 10-year Treasury yield remains near 4.6%, close to its highest level of the year.
The European Central Bank announces its latest rate decision today, offering another test of how higher energy prices are affecting global policy.
Trade remains another source of inflation pressure.
New 50% tariffs on selected Canadian goods add another supply-side cost as the Fed prepares for its July 29 meeting.
Macro Signal
Only a week ago investors debated when rate cuts would begin. Today they are debating whether another hike comes first.
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Intel carries the market's next AI test.
The stock is up 163% this year. Options imply a move of about 15% after earnings.
Wall Street expects $14.4 billion in revenue and adjusted earnings of $0.20 per share.
Investors will focus on data center and foundry results after Taiwan Semiconductor (TSM) said agentic AI is driving stronger demand for CPUs alongside GPUs.
SpaceX is facing a different challenge.
SPCX trades near $123, down about 45% from its June peak of $225.64. Short interest has climbed to roughly 32% of the float ahead of first public earnings on Aug. 4 and the first major share unlock.
Capital Signal
Intel is priced for strong results. SpaceX is priced for disappointment. Both must prove AI spending becomes profitable before investors lose patience.
Bitcoin is following the same risk signals as equities.
Under the surface, demand continues improving.
U.S. spot Bitcoin ETFs have posted six straight days of inflows, the longest streak since early May. The funds have added about $727 million over five sessions, lifting total ETF assets above $79 billion.
Strategy (MSTR) tells another story.
The company has not bought Bitcoin for two straight weeks, keeping holdings at 843,775 BTC while raising capital through stock sales. Its shares now trade below the value of the Bitcoin on its balance sheet, showing investors are no longer paying a premium for that treasury.
Zcash remains one of crypto's strongest performers. The token trades near $540 ahead of the July 28 Ironwood upgrade, with futures open interest above $1 billion.
The Senate still has not scheduled a vote on the Clarity Act as negotiations continue over ethics provisions before the August recess.
The Verdict
ETF inflows are improving. Strategy's valuation tells a different story. Bitcoin still needs its own catalyst.
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This week has become one long test of AI spending.
Alphabet showed demand remains strong.
Tesla showed margins are under pressure.
Intel now has the chance to show whether suppliers are turning that spending into revenue.
Oil is making the challenge harder.
Brent has moved above $94 as risks build in both Hormuz and the Caspian. That has pushed rate expectations higher just days before the Fed meets.
Bitcoin is improving beneath the surface with six straight days of ETF inflows.
The question is still the same.
Is all this spending creating lasting value, or simply moving pressure from one balance sheet to another?
