Alphabet and Tesla saw their stock prices drop last week following the release of their quarterly results. Investors soured on these companies due to declining free cash flow and rising capital expenditures related to artificial intelligence. Microsoft, Amazon, Apple and Meta will report earnings this week, with markets closely watching free cash flow, capital spending and growth. Apple has kept capital spending relatively restrained, while other tech giants have seen their investments surge and cash flow decline. Bond markets are beginning to react to this cash drain caused by massive AI investments.
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