Friday, July 24
Tesla's profit collapse wipes out more than Toyota's worth
A brutal earnings report sent Tesla into a single-session freefall that dwarfed the entire market value of the world's biggest automaker, while other big names had a much better week.
Top Stories
Tesla's margin implosion signals the AI spending bet is now eating the car business
Tesla reported that its operating margin fell to 1.4% from 4.1% a year ago, free cash flow turned negative, and the company doubled down on a $25 billion spending plan for AI and robotaxi development, sending the stock down sharply in a single session that erased more value than Toyota's entire company is worth.
The real story is not the revenue miss but what Tesla is trading away: a profitable, high-margin auto business is being hollowed out to fund a future product that does not yet exist at scale.
Verizon and Schlumberger both beat expectations, but for completely different reasons
Verizon added more subscribers than expected, locked in a billion-dollar fiber deal with Google, and raised its full-year profit outlook, all on the same day that oil-services giant Schlumberger posted strong results by leaning on data-center demand and offshore drilling to offset war-related disruptions in the Middle East.
The pairing matters because two unrelated industries beating on the same day suggests the broader economy is holding up better than the headlines about tariffs and rate uncertainty would imply.
American Express earned more than expected, but the market punished it for not growing fast enough
American Express posted earnings above analyst estimates, raised its full-year revenue growth forecast to 10%, and reported nearly $456 billion in card spending during the quarter, yet the stock fell sharply because revenue itself came in below what Wall Street had penciled in and the company left its full-year profit guidance unchanged despite the earnings beat.
The reaction is a reminder that beating on profit is not enough when investors are paying a premium price for a growth story and the top-line numbers do not fully deliver.
Also Today
- Charter's mobile gains cannot plug the broadband hole
- Bank of America lifts its dividend by 14%
- Outlook Therapeutics wins FDA approval for vision-loss drug
Takeaway
Today's session was defined by a split screen: Tesla's profit being sacrificed on the altar of future bets dominated the conversation, while Verizon and Schlumberger quietly reminded the market that old-economy execution still gets rewarded.
The most important thing to watch next is whether Charter's broadband subscriber losses accelerate in the next quarter, which would confirm that fixed wireless and fiber are structurally taking over from the cable giants rather than just nipping at the edges.
