Google And Tesla Shed $500 Billion As AI Suppliers Cash In

Alphabet and Tesla lost roughly half a trillion dollars in combined market value this week, even as the companies supplying their AI infrastructure buildout saw sharp gains, highlighting a growing divide over who profits from the artificial intelligence spending boom.

Big AI Spenders Sink While Suppliers Rise

The five largest AI spenders, Alphabet, Microsoft, Amazon, Meta, and Tesla, fell an average of 9% this week, while a basket of the companies they buy equipment and infrastructure from rose an average of 11%. Even Nvidia benefited, climbing 2% and adding roughly $100 billion in market value.

Alphabet And Tesla Punished For Different Reasons

Alphabet beat expectations on nearly every metric, with revenue up 24% and cloud growth at 82%, yet its stock fell 8%, wiping out about $330 billion in value after capital spending nearly doubled to $45 billion, pushing free cash flow negative for the first time. Tesla saw revenue beat forecasts but earnings miss badly, with operating margin dropping to 1.4% from 4.1% a year earlier, sending shares down 18% in their worst week since 2022.

Suppliers Benefit From The Same Spending Wave

Supermicro Computer jumped 25% after reporting more than $60 billion in new orders, while data center operator Digital Realty rose nearly 15% on record leasing demand. Despite the sharp individual losses, the broader S&P 500 finished the week roughly flat.