Tesla, Alphabet lose hundreds of billions after AI spending plans

Tesla and Alphabet shares were hit by a sharp sell-off following their quarterly earnings reports. Both companies signalled significantly higher spending on artificial-intelligence infrastructure, leaving investors uneasy about when those costs will pay off.

Tesla suffered its worst one-day drop in a year, with Elon Musk's plan to spend "as fast as we can" drawing a mixed reaction on Wall Street. Alphabet lost a comparable chunk of value despite strong growth in its search and cloud businesses.

The declines fed into a broader wave of AI-spending anxiety across tech stocks and helped drag down the Dow Jones Industrial Average. Analysts say the rest of earnings season will be pivotal for market direction.