NEW YORK, July 24, 2026, 10:07 a.m. EDT
The Nasdaq Composite dropped 0.6% to 24,995 on Friday, as investors applied stricter scrutiny to AI-related expenditures. The Dow Jones rose 0.2% to 51,826. The S&P 500 edged down 0.1% to 7,404.
Alphabet NASDAQ:GOOGL and Tesla NASDAQ:TSLA together posted $50.7 billion in capital expenditures for the second quarter, while jointly generating negative free cash flow totaling approximately $7.0 billion.
The combination highlights a change in how the market evaluates companies. Robust sales growth is not enough to settle the discussion. Investors are now also looking for proof that additional capacity is financially sustainable.
Alphabet’s cloud business expanded by 82% during the quarter. Shares dropped almost 7% on Thursday and regained just 1.2% by early trading on Friday.
Saxo Markets strategist Charu Chanana noted that investors are set to focus more on “whether AI revenue can grow faster than capital expenditure, depreciation and operating costs.” Reuters
Intel NASDAQ:INTC provided a clearer illustration during intraday trading. The stock rose 6% ahead of the opening after a positive outlook, but later slipped to finish down 3.4%.
Intel forecast third-quarter revenue in the range of $15.8 billion to $16.8 billion, exceeding analysts’ expectations of $15.1 billion. The company also increased its 2026 capital spending projection to $20 billion, up from $18 billion.
Verizon NYSE:VZ shares rose 2.4% as the company reported an increase of 184,000 postpaid phone subscribers. FactSet analysts had forecast 103,900 net additions.
Verizon increased its free-cash-flow growth outlook to a range of 9%-10%, up from its earlier estimate of at least 7% growth. Chief Executive Dan Schulman attributed the improvement to “real value rather than subsidized promotions.” Reuters
| Company | Price | Friday move | Cash and spending signal |
|---|---|---|---|
| Alphabet | $321.65 | +1.2% | Q2 capital spending totaled $44.9 billion; negative free cash flow of $5.9 billion. |
| Tesla | $314.87 | -1.5% | Q2 capital spending reached $5.8 billion; free cash flow at negative $1.1 billion. |
| Intel | $96.78 | -3.4% | 2026 capital spending projection increased to $20 billion. |
| Verizon | $44.86 | +2.4% | Free cash flow growth guidance raised to 9%-10%. |
*Preliminary, delayed stock data as of approximately 9:52 a.m. EDT.
The economic environment imposed further limitations. S&P Global’s flash composite purchasing managers’ index increased to 53.6 after 51.9. Input cost inflation hit its highest level in 14 months.
Even so, the 10-year Treasury yield slipped to 4.665%. Brent crude dropped 3.3%, and U.S. crude shed 2.6%. These shifts offered limited relief beyond the tech sector.
The split on Friday came after Thursday’s technology selloff. By Thursday, the Dow had fallen 0.83% for the week, putting it on course for a third straight weekly drop. Both the S&P 500 and Nasdaq were set for their second consecutive week of losses.
The focus on cash intensifies next week as Microsoft NASDAQ:MSFT, Meta Platforms NASDAQ:META, Apple NASDAQ:AAPL, and Amazon.com NASDAQ:AMZN prepare to report. Investors may view their capital allocation strategies as being just as significant as their quarterly earnings.
Risks are still balanced. Rising oil prices or higher inflation may push bond yields up. Increased cash flow from Big Tech could swiftly change the market direction.
Related articles: NASDAQ:GOOGL
