Earnings Live: Tesla Misses, Google Boosts AI Spending, Chipotle Declines
Overview
Second quarter earnings season is well underway, with S&P 500 companies delivering mostly positive results so far. Analysts set lower expectations heading into the quarter due to tariff concerns, high stock valuations, and economic uncertainties in the US. With 112 companies reporting—including GM, Coca-Cola, Alphabet, and Tesla—investors gain insight into how businesses are performing amid these challenges. Early data from FactSet shows a projected 5.6% increase in earnings per share for the S&P 500 in Q2, based on 12% of companies having reported.
Tesla Stock Slides After Earnings Call
Tesla's shares dropped roughly 3.5% following its quarterly earnings call. CFO Vaibhav Taneja highlighted the negative impact of the recently signed federal legislation, which reduces key tax credits for electric vehicles and solar energy—credits Tesla has heavily utilized. Tariff-related expenses also rose to approximately $300 million this quarter, further pressuring margins.
CEO Elon Musk forecasted that Tesla’s autonomous ride-hailing service could reach half of the US population by year-end, pending regulatory approvals.
Tesla Misses Q2 Earnings Estimates
Tesla reported Q2 revenue of $22.50 billion, slightly below the $22.64 billion consensus, marking a 9% decline from $25.05 billion a year earlier. Adjusted earnings per share came in at $0.40 versus the expected $0.42. Operating income was $923 million, falling short of the $1.23 billion forecast. The company reaffirmed plans to launch a more affordable model with volume production targeted for the second half of 2025.
Google Exceeds Q2 Expectations, Raises Capital Spending
Alphabet, Google's parent, delivered a strong quarter with adjusted EPS of $2.31 and revenue excluding traffic acquisition costs (TAC) of $81.2 billion. Both figures topped analyst estimates of $2.17 EPS and $79.6 billion revenue ex-TAC. The company announced a capital expenditure increase to $85 billion, up $10 billion from prior guidance, signaling a ramp-up in investments, notably in AI technologies.
Chipotle Sees Decline in Foot Traffic, Cuts Guidance
Chipotle’s stock fell 9% after reporting a sharper-than-expected decline in foot traffic during Q2, continuing a slowdown that started earlier in the year. The company lowered its full-year same-store sales outlook to flat. CEO Scott Boatwright noted ongoing efforts to stimulate sales but acknowledged headwinds facing the fast-casual chain.
Southwest Airlines Misses Profit Expectations
Southwest Airlines reported weaker-than-expected second quarter profits, citing sluggish domestic travel demand and softer fares during the early summer travel season. Operating revenue declined slightly to $7.24 billion from $7.35 billion a year ago, reflecting ongoing challenges in the airline sector.
IBM Tops Estimates on AI-Driven Mainframe Sales
IBM beat revenue and profit forecasts for Q2, buoyed by renewed demand for its mainframe systems, which have benefited from AI upgrades. The company posted $16.98 billion in revenue, up nearly 8% year-over-year.
T-Mobile Reports Strong Customer Growth and Earnings Beat
T-Mobile posted a solid quarterly performance, easily surpassing analyst estimates. The telecom giant led its competitors in net new customer additions during Q2, maintaining momentum in a highly competitive market.
ServiceNow Surges on Earnings Beat Fueled by AI Demand
ServiceNow’s stock jumped after the company exceeded earnings expectations. CEO Bill McDermott highlighted strong demand for generative AI products, noting that corporate AI spending is set to rise substantially through the end of the year.
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