CNBC Closing Bell
2026-07-23 · Hosted by Scott Wapner, Melissa Lee, Michael Santoli · CNBC
Executive Summary
Wednesday's session closed mostly lower — the S&P 500 slipped slightly and the Nasdaq fell nearly half a percent — as investors waited for a heavy slate of after-hours earnings from Alphabet, Tesla, IBM, ServiceNow, and Texas Instruments. Alphabet beat on revenue ($119.8 billion versus $116.93 billion expected) and posted 82% year-over-year cloud growth to $24.8 billion, but shares still traded down as investors focused on a new $195-205 billion CapEx guide for 2026. D.A. Davidson's Gil Luria called the quarter "stable, steady... a 260-yard drive, not a 300-yard drive," noting search and YouTube came in roughly in line while margins ticked down slightly.
Key Stories & Changes
1. Alphabet Beats on Cloud, Slides on CapEx Guidance
Revenue: $119.8 billion versus $116.93 billion expected
Cloud revenue: $24.8 billion, up 82% year-over-year, versus $22.24 billion expected
CapEx: $44.92 billion for the quarter, beating estimates
New full-year 2026 CapEx guide: $195-205 billion
Adjusted EPS: $2.85, a 4-cent miss when adjusted for a $99 billion equity securities gain (tied to stakes in Anthropic and SpaceX)
Search and other revenue: $63.3 billion versus $63.42 billion expected (slight miss)
YouTube revenue: $11.1 billion, beating the $10.81 billion estimate
Cloud backlog: $514 billion, up 82% year-over-year
Google did not sell any equity under its $80 billion at-the-money offering facility — an overhang analysts said investors want resolved
2. Tesla Misses EPS Estimates Despite Revenue Beat
EPS: 33 cents versus 51 cents expected
Revenue: $28.24 billion versus $25.7 billion expected
Energy storage revenue: $3.12 billion, below the ~$3.5 billion estimate
CapEx: $5.78 billion, below the $6.5 billion estimate
Free cash flow: negative $1.09 billion
FSD subscriptions: 1.48 million cumulative, up 200,000 from 1.28 million in Q1
Megapack 3 production on target to begin this year; Optimus production lines being installed in Fremont
3. IBM and ServiceNow Ease "AI Crowding Out Software" Fears
IBM: IBM — +3.5% after hours — Revenue missed slightly ($17.16B vs. $17.58B) but CEO Arvind Krishna reaffirmed 4-5% full-year revenue growth guidance; called software spend shift a deferral, not a cancellation
NOW: ServiceNow — Recouped early losses — Beat on revenue ($3.99B vs. $3.93B) and EPS (90 cents vs. 85 cents); CEO Bill McDermott touted #1 cybersecurity growth position
TXN: Texas Instruments — -3.3% despite beat — EPS of $2.14 beat by 21 cents; stock still fell despite raised Q3 guidance, following a 70% YTD run
LVS: Las Vegas Sands — -7% — Revenue missed ($3.15B vs. $3.3B); Macau margins hurt by World Cup competing for discretionary spending
4. GE Vernova and EQT Show Mixed Energy/Industrial Results
GE Vernova: raised revenue guidance on hyperscaler gas turbine demand, but stock fell nearly 9% as guidance was seen as conservative; CEO Scott Strazik cited geopolitical cost pressures
EQT: mixed quarter with raised production guidance and lower CapEx; shares rose about 8%
5. Market Backdrop: Resilience Amid Rising Rates and Oil
10-year yield nudged toward 4.70%; oil moved from high-$60s to roughly $86-90 per barrel
Evercore's Julian Emanuel called the market action "three yards and a cloud of dust" — grinding, resilient, not euphoric
He identified $95 WTI as a level that could begin to slow the economy and complicate Fed communication
House passed a ban on congressional stock trading (all Republicans plus 13 Democrats); bill faces low odds in the Senate
Trends Identified
1. CapEx Guidance Is Now the Dominant Swing Factor for Hyperscaler Stocks
Despite strong headline growth from both Alphabet and Tesla, analysts on the show repeatedly pointed to capital spending guidance — not revenue or margin — as the reason shares moved lower. Gil Luria framed Microsoft's upcoming CapEx guide (due next week for its fiscal year-end) as the next major test: growth of 20-30% would be well received, above 40% could trigger backlash.
2. AI Is Not Uniformly "Crowding Out" Enterprise Software Spend
IBM and ServiceNow's results, following a scare from Pegasystems earlier in the week, suggested the narrative of AI infrastructure spend cannibalizing traditional software budgets is more nuanced than feared. Analyst Gil Luria noted only software companies with direct AI exposure (Palantir, Snowflake, and now ServiceNow) are seeing accelerating growth, while the rest of the sector broadly decelerates.
3. Chip Selling Is Becoming a New Hyperscaler Revenue Line
Both Google (TPUs) and Amazon (Trainium) are emerging as chip vendors in their own right, a business Gil Luria called "incremental to everything" and potentially worth tens of billions in additional revenue if allocation from TSMC increases.
4. Market Resilience Faces Rising Macro Headwinds
Julian Emanuel's framework identifies $95 WTI oil and a 10-year yield approaching 5% as key thresholds where macro conditions could begin to weigh on equities, even as the AI-driven earnings cycle continues to support the broader market into 2027-2028. ---
Sentiment Analysis
Overall Market Sentiment: Cautiously Constructive
Analysts largely framed the day's earnings as fundamentally solid but overshadowed by rising CapEx and macro concerns, producing muted after-hours stock reactions despite strong underlying numbers.
Risk Factors Highlighted
Alphabet CapEx acceleration: A jump to $195-205 billion for 2026, with talk of $300+ billion next year, raises questions about returns on that spend.
Alphabet equity overhang: The unused $80 billion at-the-money offering facility remains a sentiment risk until resolved.
Search growth deceleration: A slight miss versus estimates raises concern about AI's long-term impact on Alphabet's core ad business.
Tesla cash burn and margin pressure: Negative free cash flow and bottom-line miss raise questions about funding the AI/robotics pivot.
Rising oil prices: Oil approaching $90-95 per barrel could pressure consumer spending and complicate Fed policy.
Rising bond yields: 10-year yield nearing 4.70% and 30-year near cycle highs create competition for equity valuations.
Enterprise software "crowding out": While IBM and ServiceNow eased fears this week, the risk of AI infrastructure spend displacing traditional software budgets remains a live theme for the rest of earnings season.
Momentum/leverage unwind risk: Goldman-tracked momentum factor suffered its worst three-month drawdown outside a recession in 45 years, raising volatility risk.
Congressional stock trading ban uncertainty: Passed the House but faces low odds in the Senate, creating political overhang without resolution.
This episode was covered in today's [The Market Signal — 2026-07-23](https://marketsignal.beehiiv.com/p/the-market-signal-2026-07-23), a cross-source synthesis of multiple podcast reports.