Tesla stocks decrease post-market hours, while Alphabet reaps benefits from earnings surpassing predictions
Tesla and Alphabet Announce Q2 2025 Earnings
Tesla and Alphabet, two of the world's most influential tech companies, announced their second-quarter earnings for 2025 on July 23, 2025.
Alphabet's Q2 2025 Earnings
Alphabet released its earnings before the conference call at 1:30 PM Pacific Time (4:30 PM Eastern Time), and the earnings call took place at 9:30 PM British Summer Time (BST). The tech giant reported a revenue of $96.4 billion, a 14% increase year-on-year, and earnings per share of $2.31, up 22%.
The strong results were largely due to the outperformance of Google's core business lines, especially Search and Cloud. However, the market remains sceptical about Google's AI staying power, with analysts questioning its ability to maintain its dominance in the AI era.
Alphabet's CFO, Anat Ashkenazi, explained that the extra $10 billion in capital expenditure largely reflects additional investment in servers, the timing of delivery of servers, and an acceleration in the pace of data centre production, primarily to meet cloud customer demand.
Tesla's Q2 2025 Earnings
Tesla's earnings were released after the US market close (around 4 PM ET), and the earnings call started at 10:30 PM BST. The company forecasted revenue to be $22.28 billion and earnings per share to be $0.40 for Q2.
Despite the forecasts, Tesla's revenue for Q2 2023 was reported at $22.50 billion, a 12% decrease year-on-year, and earnings per share remained at $0.40, no change year-on-year. The company's Q2 delivery numbers also fell year-on-year for the second consecutive quarter.
However, Tesla's CEO, Elon Musk, announced that the company's robotaxi is set to expand "well in excess of what competitors are doing" in the next two weeks. He also revealed that Tesla's affordable car has begun production and will scale up in the second half of 2025.
Market Reaction
In the after-hours trading following the earnings release, Tesla's share price fell 2.8%, but gained ground later in the day. Alphabet's share price dropped 2.3% in after-hours trading following the earnings release, but later saw a 2.7% increase during the earnings call.
The market will need more convincing on Google's AI staying power, according to Matt Britzman, senior equity analyst at Hargreaves Lansdown. On the other hand, customers seem to love Tesla's robotaxi, with Tesla's CFO, Vaibhav Taneja, confirming the positive feedback.
Looking Ahead
Both Tesla and Alphabet are looking to the future. Tesla aims to produce 1 million Optimus robots annually within five years, with prototypes this year and scaled production next year. Alphabet, meanwhile, is increasing its capital expenditure for 2025 to approximately $85 billion, primarily to meet cloud customer demand.
In the robotaxi race, Tesla is aiming to serve half of the US population by the end of the year, while Cybercab production is set to start in volume in 2026.
[1] Alphabet Q2 2025 earnings release and call details
[2] Tesla Q2 2025 earnings release and call details
[1] Despite Alphabet's strong Q2 2025 earnings, concerns about its AI staying power persist, with the market requiring further reassurance.
[2] Tesla's Q2 2025 earnings didn't meet expectations, but the company's much-anticipated robotaxi and affordable car are set to launch, sparking optimism for the future.
[3] Technology investment in finance, education-and-self-development, general-news, and sports sectors may see a boost as Alphabet increases its capital expenditure for 2025, aiming to meet cloud customer demand.
