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Tesla sold more cars than ever last quarter and still burned through 1.1 billion dollars in cash, its first cash-burning quarter since early 2024. Revenue hit a record while operating profit fell 57 percent. The gap is a 5.8 billion dollar capital-spending spree on robotaxis, AI, and Optimus that has turned the world's most profitable EV maker into something that spends like a hyperscaler.
Alphabet's revenue rose 24 percent last quarter while its depreciation bill jumped 42 percent and its free cash flow went negative. The gap between reported profit and real cash comes down to one accounting choice: how long a company pretends its AI chips will last. Michael Burry estimates that choice hides roughly 176 billion dollars of overstated profit across Big Tech.
The Magnificent Seven erased 2.3 trillion dollars of market value in June while the semiconductor index posted the best first half in its recorded history. Both trades price the same capex dollars, and they point in opposite directions.