Muted Big Tech Earnings Put AI Server Demand in Focus

Investors are increasingly demanding evidence that massive artificial-intelligence spending can translate into durable cloud growth and profits. Results from Alphabet, Tesla and IBM failed to surpass market expectations, underscoring a shift from enthusiasm over AI investment plans toward scrutiny of returns. Yet strong gains in server makers suggest that demand for the hardware underpinning data-center expansion remains a key source of support for the technology sector.

On July 22, Alphabet reported quarterly revenue of $119.8 billion and earnings of $2.85 a share, while capital expenditure doubled from a year earlier to $44.9 billion. Tesla posted adjusted earnings of $0.33 a share, and IBM reported $17.2 billion in sales, with both falling short of expectations. Super Micro Computer closed 19.84% higher after forecasting a 15% to 17% quarterly gross margin and highlighting AI data-center projects, while Dell gained 9.32% on robust server orders.