Alphabet and Tesla reported higher expenses this quarter. Their stock prices fell. Retail investors who discovered that corporations require capital expenditures to operate experienced what medical professionals call "learning."
The companies are spending on AI infrastructure. This is apparently controversial. Wall Street analysts expected both firms to generate unlimited revenue growth while spending nothing, defying basic accounting principles and the laws of thermodynamics. When this did not occur, they downgraded their price targets and told CNBC they were "concerned about the pace of investment." The pace they preferred was free.
Tesla builds cars and batteries. Alphabet runs the internet's largest search engine and sells ads against your divorced uncle's YouTube conspiracy theories. Both require computers. Computers cost money. Shareholders learned this Thursday.
The technical setup remains irrelevant. Support and resistance levels continue not mattering. The 50-day moving average crossed the 200-day moving average last month, which means absolutely nothing but will be cited by someone on television as a death cross, because television requires content every sixteen minutes regardless of whether information exists.
Retail traders checked their portfolios after hours. They saw red numbers. They opened Reddit. They typed "Is this a buying opportunity?" into a forum populated entirely by other people who also do not know. Someone responded "HODL" using four letters, which saved time but not money. Another replied with a rocket emoji. The rocket was pointed up, but their account value was pointed down, creating a visual metaphor they will not appreciate until Monday.
AI spending will continue. Earnings will be reported. Stocks will move. Charts will be drawn. None of it will mean what you think it means. The trend is your friend until it stops, at which point it was never your friend. It was just a line you drew on a screen to feel less afraid of randomness.
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