3.6 Trillion Giants Earnings Season: A Big Test of Profits Under the AI Arms Race

According to Woofun AI, on Tuesday and Wednesday, Meta (META.US), Tesla (TSLA.US), Netflix (NFLX.US), and SpaceX (SPCX.US) will centrally disclose quarterly earnings reports. The total valuation of these four NASDAQ giants is about 3.6 trillion US dollars, and their recent stock prices are more driven by expectations than actual performance exceeding expectations.

According to data compiled by Woofun AI, Meta plans to invest 130 billion US dollars to 145 billion US dollars in equipment and data center construction in 2026. After the related expenses reached 31.1 billion US dollars in the second quarter, free cash flow was only 784 million US dollars. Coupled with profits falling short of expectations, the stock price fell by more than 7% after the market;

Additionally, Meta is also expected to incur approximately $100 billion in litigation costs this quarter, stemming from settlement agreements of up to $18 billion. SpaceX spent $18.4 billion in the second quarter, of which $15.8 billion was invested in artificial intelligence, with a book loss of $541 million. However, Chief Financial Officer Brett Johnson pointed out that the adjusted AI business achieved profits of $1.1 billion, most of which went to NVDA.US (NVDA.US), and the company also expects capital expenditure to remain at a level similar to that of the second quarter.

Tesla delivered 486,532 vehicles in the third quarter, exceeding market expectations of about 462,000 vehicles; however, earnings per share for the second quarter were $0.33, lower than market expectations of $0.51 and $0.40 in the same period last year, putting significant pressure on profit margins. Musk said that SpaceX expects to achieve annual recurring revenue of more than 100 billion US dollars in December this year, which is related to whether it can make progress towards the goals set in August. Netflix, on the other hand, faced different tests. Its revenue for the third quarter was US$12.86 billion, and its revenue guide for the full year of 2026 was 51 billion to 51.4 billion US dollars, and advertising revenue was about US$3 billion. Bank stocks reported well last week but did not rise. Jim Cramer pointed out this contradiction. This week, AI reinvestment companies may face similar market reactions.