Episode summary
Earnings Roundup: Alphabet Beats on Cloud Sales, Tesla's Profit Disappoints | Bloomberg...
Bloomberg Daybreak: US Edition
· · 21 min · Hosts: Carol Massar, Tim Stenovec, Ed Ludlow · Guests: Keith Naughton, Mandeep Singh
Summary
Alphabet’s second-quarter results were framed as a strong AI and cloud print, with cloud revenue up 82% and the business now running at a $100 billion annualized pace. The analysts on the segment said the main question was not whether Alphabet is growing, but whether the growth is broad enough beyond cloud. They focused on a search miss that was slight but notable, the size of the backlog, and whether Gemini usage is becoming meaningful enough to justify the company’s massive spending plans.
Tesla’s quarter was judged much more harshly. Profit came in well below expectations at 33 cents versus 51 cents, and the analysts said the company still needs the car business to generate enough cash to fund robotics, autonomy and AI. Record vehicle deliveries did not offset lower average selling prices, weaker margins and negative cash flow, and the conversation kept returning to whether Tesla is still fundamentally a car company or a more complicated compute and robotics story.
The broader argument was that both companies are being judged on capex discipline and evidence that AI spending is translating into visible business results. For Alphabet, that means more cloud, more token usage and a clearer payoff in search and Gemini. For Tesla, it means moving from promises to deliverables on robo-taxis, Optimus and the rest of Elon Musk’s “whole universe” strategy.
Key takeaways
- Alphabet’s cloud revenue grew 82%, but the analysts said the market still wants a larger backlog and clearer evidence that search and Gemini are benefiting from AI investment.
- Mandeep Singh said Alphabet could have negative free cash flow next year if capex rises to $300 billion, even with 24% topline growth.
- Keith Naughton called Tesla’s quarter “a big miss” at 33 cents versus 51 cents and said the company still needs car profits to fund AI and robotics.
- Ed Ludlow said Tesla’s lower average selling prices and weaker margins showed that record deliveries were not enough to prove the future is already underway.
- The panel said the real Alphabet debate is whether token usage and enterprise adoption can offset concerns about search and the frontier model race.
Notable quotes
“Cloud 82% growth. uh it's a hundred billion dollar run rate business now which is phenomenal”
“We expected that. They didn't go as negative as was expected. So that's good. But they did go negative cash flow”
“believe it or not, this company will have negative free cash flow next year”
“they had lower average selling prices. So you have record vehicle deliveries but lower ASP has not gone well for them”
“Tesla as a car company is is not really a growth story anymore. They are contracting”
How the episode opens
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We really want to go all in on Alphabet and Tesla. We've got a great team effort uh to do just that. Uh in the house with us is our Mandep Singh. He is of course uh Bloomberg uh intelligence, excuse me, head of global uh technology.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- alphabet earnings
- tesla earnings
- cloud revenue
- ai investment payoff
- robotics autonomy ai
Companies and tickers mentioned
- GOOGL
- GOOG
- TSLA
- Alphabet
- Tesla
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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