Earnings Roundup: Is the 2Q Worry Overdone?

Among S&P 500 companies that reported earnings this past week, those that beat earnings expectations still got beaten up if heavy capital spending on artificial intelligence gave traders and investors jitters.

Heavy AI infrastructure spending is stretching margins and revenue guidance. Shares of Tesla (TSLA) moved lower last week after reporting it burned through cash, among other challenges. AI financing will be under the microscope when Microsoft (MSFT) and Meta Platforms (META) report earnings Wednesday, and Amazon.com (AMZN) and Apple (AAPL) report Thursday.

As the chip stock rout continued Tuesday, companies like Boeing (BA) and The Coca-Cola Company (KO) had good quarters that helped lift the Dow Jones Industrial Average index. But the dominance of the tech trade shrouds significant financial strength across sectors. Consider that with 27% of S&P 500 companies having reported as of July 24, 86% beat earnings-per-share estimates, well above 5-year and 10-year averages, according to a public FactSet report. If quarterly year on year earnings growth of roughly 38% holds, it would be the best index profit growth since the third quarter of 2021. One caveat: Alphabet (GOOGL) is contributing roughly 12 points of that growth, and its GAAP earnings include a $98 billion net gain primarily due to unrealized equity security appreciation. Still, of the 265 companies that reported EPS guidance for fiscal 2026 or 2027 so far, more than 58% (155 of 265 company reports) have been positive, according to FactSet.

AI Capital Spending, the Earnings Season Stress Point

Alphabet, the bellwether for the Magnificent 7, beat Q2 revenue expectations with Google Cloud revenue up 82%, but its shares fell after it lifted its 2026 capex forecast to $195 billion to $205 billion from its previous guidance of $180 to $190 billion. For Tesla, revenue was strong, but earnings missed, free cash flow turned negative, and margins slid as the company spent on AI and robotics.

“The AI trade is cooling,” says Ted Thatcher, President of Great Lake Wealth. “Google is being punished because it is raising capex again. Micron (MU) has had a huge rally and is retracting significantly. It puts an exclamation point on the whole, cyclical, bumpy summer that we expected.” See Thatcher: GOOGL, MSFT, META & AMZN Will be Long-Term Winners Despite CapEx

Here are some highlights from big earnings reports along with interviews of note:

Corning (GLW) shares moved lower despite beating earnings expectations and the CEO reporting “a new phase of accelerating growth.” GLW Hits 6-Month Low After Earnings & Options Trade Amid Stock Sell-Off

Defense stocks RTX (RTX) and Lockheed Martin (LMT) moved higher on strong demand, growing backlogs and healthy free cash flow. It was something one of our guests expected in June: RTX & LMT Earnings Point to Long-Term Defense Demand

George Tsilis wrote that Microsoft Earnings Preview: Azure, Copilot, AI Spend Face a High Bar and this video explains the business and its competition: Tech Corner: MSFT Faces Biggest AI Test Yet

What ETF Trends Say About Earnings Season & Rotation Out of AI

How should investors cut through the earnings noise to create value? What MU "Peak Earnings" & SPCX Valuation Show in Stock Market Dynamics

Don’t forget, there is an approximately 35% chance that the Federal Reserve Open Market Committee could announce an interest rate increase this afternoon, according to the CME Group FedWatch tool. This would be the sleeper headline buried in scores of earnings reports this week, Jim Iuorio notes.

Catch up on all our earnings coverage and watch some great interviews on interpreting moves by the Federal Reserve on interest rates.

Economic events/data, Thursday, July 30, 2026 (ET)

• 08:30 AM: Advance GDP Growth Rate (QoQ) (Q2)

• 08:30 AM: Personal Income and Outlays (Jun)

• 08:30 AM: Initial Jobless Claims (Weekly)

Earnings Calendar Thursday:

Premarket: Mastercard (MA), Bristol Myers Squibb (BMY), Shell (SHEL), Altria Group (MO), Regeneron Pharmaceuticals (REGN)

Postmarket: Apple (AAPL), Amazon (AMZN), Coinbase Global (COIN), Reddit (RDDT), Rivian Automotive (RIVN), Strategy (MSTR), Roblox (RBLX), First Solar (FSLR), DexCom (DXCM), GoDaddy (GDDY)

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