Google Earnings Are OUT! Enough to Save AI Stocks? & TSLA, NOW Earnings

Market / Macro Context (Today’s Backdrop)

• Index performance

  • S&P 500: down about 122 points (as referenced)
  • QQQ: down about 0.51%

• Earnings-sensitive “AI infrastructure” trade

  • Market tone described as muted/apprehensive ahead of Google earnings (after the close)
  • Mixed-to-risk-off rotation, with limited broad follow-through

• Oil + Middle East risk driving rates pressure

  • Crude oil: up ~25% in July (over the month)
  • Middle East escalation noted as an oil/Hormuz overhang
  • Treasury yields:
    • 10-year: ~4.66%
    • 20-year: ~5.17%
  • Claimed impact: pressure on loan demand, indirectly consumer demand, and pressure on rate-sensitive sectors

• Fear/Greed

  • Market still described as a “fear environment”
  • Sector rotation occurs, but follow-through is limited

• “Two types of days” pattern in July

  • Semiconductors down while the rest of the market up
  • Or semis up while the rest lags
  • No sustained “everything up” days and no persistent “everything down” days

Instruments / sectors mentioned: S&P 500, QQQ, SPY, XLF (Financials ETF), XLV (Healthcare ETF), SMH (Semiconductor ETF), Russell 2000.

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News Items (Finance / Markets Relevant)

• Middle East escalation → oil higher

  • Trump statement: U.S. would bomb infrastructure if Iran attacks ships in the Hormuz area
  • Framed as an oil price driver and a rates/yield overhang
  • Noted as potentially less market-wide than March’s reaction, but still a concern

• US investigating potential restricted AI chip/model access

  • Commerce Department probing whether Moonshot’s Kimmy K3 accessed restricted Nvidia chips and used a distilled Anthropic Fable model
  • Officials considering adding Moonshot to the entity list
    • Characterized as preliminary and not a ban
  • Jensen Huang (Nvidia): open models increase industry adoption, potentially boosting demand for Nvidia systems/data centers/services

• OpenAI “Presence” (enterprise AI agents)

  • Positioned as a potential sentiment headwind for software names
  • OpenAI moving deeper into enterprise software/agent tooling
  • Agents connect to company data/workflows with guardrails/monitoring

• AMD + Anthropic partnership (large AI chip deployment)

  • Deal described as “tens of billions”
    • Up to 2 GW of MI450 AI chips starting H1 2027
    • AMD invests up to $5B tied to milestones, using clawbacks to improve chip tech

• Data center demand forecast

  • Goldman Sachs: data centers could reach 194 GW by 2035
  • Emphasis: energy bottleneck (not just hardware)
  • Alpha potentially still in power/energy-related names

• Reddit vs Google search licensing renegotiation risk

  • Reddit considering turning off access to Google Search content
  • As a $60M licensing deal expires
  • Expectation: likely renegotiation at higher fees
  • Short-term sentiment negative; longer-term potentially neutral/positive

• Google model benchmark timing

  • “Intelligence index” commentary: Gemini 3.6 Flash allegedly lagging
  • Expect improvement with Gemini 3.6 Max/Ultra and Gemini 4.0 launch timing

• Robinhood Platinum card promo (consumer finance theme)

  • Non-investment but mentioned for monetization/consumer finance angle (e.g., $1,000 travel credits, 5% dining up to 50K)

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Earnings & Company-Specific Finance Notes

1) Google (Alphabet) Earnings (Major Focus)

Post-earnings move: stock down about ~2% after hours Presenter framing: earnings were “destroyed” expectations.

Key Financial Beats / Metrics (as stated)

• EPS
  • “Beat by about 216%”
  • EPS cited around $6–$6.26
  • A significant portion attributed to unrealized gains from stakes in Anthropic and SpaceX
    • Presenter claim: roughly ~$6.26 of the EPS “gain” is due to unrealized gains
    • Caveat: excluding that effect, the company “missed by almost two pennies” / was “in line”
• Revenue: ~2.34% beat
  • ~24% YoY revenue growth on ~$17B base
• Search: “tiny miss,” but +17% YoY
• YouTube: +13% YoY
• Google Cloud: +82% YoY with ~9% surprise
• Gross margin: 61.7% (improving)
• Operating income / Cloud operating income: ~20% beat cited
  • EPS supported again by the unrealized-gains item

Capital Expenditures / Guidance

• Capex: slightly higher than estimates
• FY capex raised: $195–$205B (up from $180–$190B)
• TPU revenue recognition timeline
  • Only a small portion in 2026
  • Vast majority in 2027
• Supply constraint workaround
  • Near-term use of third-party capacity (Neoclouds) in Q3
  • Expect modest near-term margin pressure

Cash Flow Risk

• Free cash flow: miss, described as ~negative $6B
  • Mentioned as one of the first negative quarters in history
• Mitigation: ~$242B cash on the balance sheet (cushion, not “forever”)

Other Operating KPIs

• Backlog: $514B (up from $460B)
• Tokens/min: 22B vs 16B last quarter
• Gemini monthly active users: 950M

Forward Valuation / Recommendation Framework

• Stated valuation: about 23x forward P/E (presenter adjusts for “fake EPS”)
• Presenter stance: “slight nibble” / “buy for foreseeable future?”
  • Not framed as a full “deal of the century”
• Chart-level idea: consider buying near the “12A” area (not numerically specified in the transcript)

Implicit disclosures/caveats (repeated): warnings about “fake news EPS” / unrealized gains distorting comparability.

Tickers mentioned: Google (GOOGL referenced conceptually), plus Nvidia (NVDA) and others (Amazon, Meta, Tesla, etc.). Investee stakes cited: Anthropic, SpaceX.

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2) Tesla (TSLA) Earnings

Post-earnings move: down about ~3.5% after hours Presenter framing: “no guidance” for deliveries/capex.

Key Financial Outcomes (as stated)

• Revenue: +26% YoY, ~7% surprise
• Deliveries: +11% surprise, +25% YoY (noted off a low base)
• Energy storage deployed: 13.5 GWh, +3% surprise (back to growth)
• Gross income / margins: gross income down ~8% YoY, margins eroding
• Operating margins: about 1.4% (down vs 4.1% prior-year)
• EPS: miss, -39% YoY decline cited
• Free cash flow: negative quarter (not meeting estimates)

Non-cash “Fake News” Adjustment

• Net income decline includes ~$1B from unrealized gains tied to SpaceX placement
• Presenter claim: underlying net income would be roughly ~$114M and “barely positive”

Strategic / Operational Highlights

• Cybercab: began production at Gigafactory Texas
• Tesla Semi: commissioning in Nevada, “on track” (2H suggested later)
• FSD: supervised penetration growing; described as best-in-industry (not perfect); subscription shift noted
• Robo-taxi rollout: live in 7 major metros
  • Expansion described as slower due to regulation
• Optimus: construction started at Fremont after decommissioning Model S/X lines
  • “Production by end of year,” full ramp into 2027 (presenter’s timeline)
• Battery capacity constraint repeatedly identified as the main limiter on vehicle production volume

Valuation / Stance

• Tesla described as high/complex:
  • Presenter cites roughly ~$1.9T-ish, ~194 P/E, ~7 PEG, ~13.64 P/S
• Recommendation tone: hold / slow accumulation, not a rush
  • Major revenue/EPS upside expected deep 2028–2029+

Tickers mentioned: TSLA (plus general references in the segment).

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3) ServiceNow (NOW) Earnings

Stock move: down about ~6.47% on the day; after-hours CEO comments discussed.

Key Metrics (as stated)

• EPS: +4.39% beat
  • $0.90 vs $0.86 expected
• Revenue: +1.52% beat
  • Presenter notes a tiny subscription revenue miss
  • Still +21% YoY subscription revenue
• RPO (Remaining Performance Obligations)
  • $29B total RPO
  • RPO +21% YoY
• Operating income: +12% surprise, +23% YoY
• Operating margins: stable in the high 20s (about 29.4% cited)
• Full-year guidance:
  • ~22% revenue growth
  • FCF guide ~$5.7B

Free Cash Flow & Yield

• Presenter estimate: ~high-4% free cash flow yield (~5%) if FCF holds

AI Agent Monetization / Pricing Model Discussion

• “AI control tower” and agent deployments: ninefold in 9 months
• CEO stance: enterprises unlikely to build their own agents
• ServiceNow positions as a governed/secure “control business”
• Pricing mix: seat + volume/consumption via tokens
• Mitigation vs seat compression risk:
  • CEO claims: addressable user base growing
  • 50% of net new business non-seat-based
  • “volume consumption” unlikely for some customers (presenter paraphrase)

Valuation / Stance

• Forward P/E described as near lows:
  • “Lowest around 22x forward earnings” vs prior 50–60x froth
• Presenter view: selloff largely sentiment-induced
• Recommendation tone:
  • Long-term (10+ yrs): not his moat match → not a “forever hold”
  • Swing (12–24 months): positioned for recovery
    • Target region roughly $95 (with current ~$100 referenced as “buy depends”)

Tickers mentioned: NOW.

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Technical Analysis / Risk Levels (Explicit)

Broad Market Levels

• S&P 500 (via SPY)

  • Upside breakout: ~755
  • Downside: watch 50 EMA
  • Support pocket: ~735 to 725

• QQQ

  • “Line in the sand”: ~692
  • If breakdown follows through: retest possible ~650 (12 EMA mentioned)

• XLF (Financials)

  • Support pocket: ~5436 down to ~5330
  • Breakdown risk: if loses 12 MA

• XLV (Healthcare)

  • Breakout/retest above prior all-time-high region
  • Watch 12 MA as downside cushion (exact number not fully specified)

Semiconductor-Specific (SMH)

• Downtrend still active
• Bull requirement: bounce + trend change
• Support box: ~593 down to ~565
• Stop-loss discipline suggested for any “bottom” attempt

Russell 2000

• Support zone: ~292 to ~286 (12 EMA referenced; “very soft”)

Single-Name Levels for Upcoming Earnings

• Apple: wait (no adds stated)
• AMD: clean break above ~576; “line in the sand” ~$500; earnings in ~2 weeks
• Amazon: support ~240 down to ~230; earnings next week; DCA tone
• Google: structure ~345 down to ~335
  • Failure could send to ~326 to ~316 (200-day EMA zone)
• Meta: if lows fail, daily area threatened ~650–630
• Microsoft: higher low ~375; prefer above ~405, target cushion 415–420
• Netflix: support ~70 down to 63; needs trend reversal
• Nvidia: support bounce ~200 down to ~190; bullish into earnings in ~3–4 weeks
• Tesla: key area ~360 down to ~340; not a swing long for presenter
• Palantir: support ~130 down to ~117
  • Expects earnings volatility; “massive breakdown” possibility if SAS sentiment weak
• SoFi: support ~17 down to ~14
  • Mentioned as under 1x peg and under 2x P/B
• SpaceX (IPO mention, private/public context)
  • “Absolute bottom” unclear
  • Nibbling idea under $100
  • Unlock starts August
• Uber: resistance 81–75; support 70–64
• TSMC: accumulation interest 380–360 if reached; focus on waiting for daily uptrend shift

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Explicit Strategy / Framework Items Mentioned

• Sector rotation / regime read

  • Expect constant rotation with limited follow-through
  • Trade slower

• Earnings risk management

  • Wait for the next-week earnings cascade
  • Use chart support/resistance levels

• “Bottom call” discipline (semis)

  • If attempting a bottom, use stop-losses below recent lows
  • Avoid assuming trend change without confirmation

• Income/option premium approach

  • Presenter suggests wheel/premium farming near levels (credit-oriented vs breakout chasing)

• Google earnings interpretation

  • Separate unrealized-gains “fake EPS” from underlying performance when evaluating valuation/trend

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Disclosures / Disclaimers

• Presenter repeatedly flags earnings distortions from unrealized gains (“fake news EPS”) for Google and Tesla
• No explicit “not financial advice” sentence appears, but the presenter emphasizes trading intent, risk, and stop-loss discipline.

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Presenters / Sources

• Presenter: unnamed YouTube host (referenced as “Will back here” in captions/subtitles)
• Referenced individuals:
  • Jensen Huang (Nvidia)
  • Sundar Pichai (Google)
  • Bill McDermott (ServiceNow)
  • Alex Karp (Palantir)
• Other sources/institutions referenced:
  • Goldman Sachs (data center demand forecast)
  • Commerce Department (entity list investigation)