To The Moon

Last night’s selloff felt like more than a normal pullback.

The Nasdaq fell 2.15%, while the VIX jumped more than 12% to 18.7. $Tesla(TSLA)$ plunged 14.53%, and $Alphabet(GOOGL)$ dropped 7.13%. By several market estimates, the Magnificent Seven lost close to $800 billion in market value in a single session.

At the same time, Brent crude moved above $100 per barrel and Treasury yields climbed.

Two pressures hit growth stocks together:

AI return concerns and renewed inflation risk.

A week ago, the market was still rewarding companies for spending more aggressively on AI.

Now investors are asking a harder question:

When will all that spending turn into profit and free cash flow?

1. The capex scare finally arrived

$Tesla(TSLA)$ fell 14.53% after investors focused on shrinking profitability and rising cash consumption.

Tesla’s second-quarter operating margin dropped to 1.4%, while free cash flow turned negative. Capital spending on robotaxis, Optimus, AI infrastructure, batteries and new manufacturing projects continued to climb.

The long-term opportunity remains large, but the market is becoming less patient with businesses that require heavy investment before generating measurable revenue.

$Alphabet(GOOGL)$ fell 7.13% despite strong headline results.

Google Cloud revenue grew 82%, but Alphabet also increased its annual capex outlook to as much as $205 billion and reported negative quarterly free cash flow of $5.9 billion.

That reaction tells us how much the market’s standards have changed.

Strong cloud growth is no longer enough by itself.

Investors now want to know:

• How much capex is required to support that growth?

• How quickly will data centers reach high utilization?

• How much will depreciation, power and infrastructure costs rise?

• When will free cash flow recover?

• Will future investment increasingly depend on debt financing?

The concern has also started spreading beyond equities.

Technology-company bonds weakened as investors reassessed the growing amount of capital required to fund AI infrastructure. Once capex anxiety reaches the credit market, financing costs can become part of the problem.

The cycle can look like this:

Unlimited capex → weaker margins and free cash flow → higher financing needs → rising borrowing costs → greater pressure on future capex.

The AI demand story can remain real while the capital-return period still proves longer than investors expected.

That is similar to the early-2000s fiber buildout: the infrastructure eventually became essential, but shareholders spent years absorbing the cost of overbuilding and delayed returns.

2. Oil above $100 and new tariffs add another inflation shock

Brent crude moved above $100 per barrel after several consecutive gains, supported by escalating shipping risks in the Red Sea and concerns over regional energy supply.

At the same time, the United States announced new forced-labor-related tariffs covering dozens of trading partners.

Together, higher oil prices and additional import costs increase the risk of renewed inflation.

That creates a difficult setup for growth stocks:

Higher energy prices raise inflation expectations.

Higher inflation reduces the Federal Reserve’s room to cut rates.

Higher bond yields increase the discount rate applied to long-duration technology earnings.

The pressure is especially uncomfortable for AI companies already facing questions about capex and cash flow.

Capital rotated toward businesses with current orders, visible cash generation and exposure to geopolitical risk.

$Lockheed Martin(LMT)$ surged 10.54%.

$RTX(RTX)$ gained more than 7%.

$General Dynamics(GD)$ benefited from new submarine-related orders.

$Oracle(ORCL)$ secured a Pentagon software contract worth nearly $7 billion.

$Newmont(NEM)$ also received support from stronger gold prices.

This looked more like a style rotation than a simple market-wide decline.

When AI returns become less certain and inflation pressure rises, investors naturally place a higher value on government contracts, current cash flow and inflation-resistant assets.

3. The market is still buying AI—but the filter is getting harsher

The session did not reject every AI-related company.

$Intel(INTC)$ jumped after reporting stronger-than-expected AI-related results and issuing an optimistic outlook. Investors also saw early signs of progress in its foundry business.

$Amkor Technology(AMKR)$ surged after securing a multiyear advanced-packaging and testing agreement with $NVIDIA(NVDA)$ worth roughly $1.5 billion.

$Advanced Micro Devices(AMD)$ also gained in after-hours trading.

These winners point toward a different part of the AI trade.

Capital is moving toward companies that can show:

• A named customer

• A signed contract

• Visible revenue

• Near-term delivery

• Clear capacity constraints

• Manageable cash-flow requirements

The market is becoming less willing to pay for distant promises.

Even within the “picks and shovels” trade, investors are separating suppliers with immediate orders from companies whose growth still depends on years of heavy spending.

Advanced packaging, foundry capacity, networking and power infrastructure may remain attractive because they are real bottlenecks with measurable demand.

TigerComments Take

Last night marked a change in how the market values AI companies.

The previous scorecard rewarded:

• Bigger models

• More aggressive capex

• Larger data-center plans

• Longer-term growth stories

The new scorecard is focused on:

• Who can convert capex into revenue fastest

• Who can protect margins during expansion

• Who can maintain positive free cash flow

• Who has current orders instead of distant possibilities

• Who can fund growth without creating balance-sheet pressure

The market has shifted from paying for the dream to pricing the cash flow.

That does not automatically mean the AI cycle is over.

It means the next stage will be more selective.

The most important signals to watch now are:

1. Whether Microsoft, Meta and Amazon report strong AI revenue alongside higher capex

2. Whether Big Tech free cash flow and operating margins stabilize

3. Whether technology credit spreads stop widening

4. Whether oil prices and Treasury yields retreat

5. Whether semiconductor rebounds broaden beyond a few mega-cap leaders

If capex keeps rising and AI revenue accelerates at the same time, this selloff could become a valuation reset.

If spending continues to grow while cash flow and profitability weaken, the market’s review of AI investment will become even tougher.

Stocks to watch

High-capex AI platforms:
$Alphabet(GOOGL)$, $Tesla(TSLA)$, $Microsoft(MSFT)$, $Meta Platforms(META)$, $Amazon(AMZN)$

Order-driven AI infrastructure:
$Intel(INTC)$, $Amkor Technology(AMKR)$, $NVIDIA(NVDA)$, $Taiwan Semiconductor(TSM)$

Defense and visible contracts:
$Lockheed Martin(LMT)$, $RTX(RTX)$, $General Dynamics(GD)$, $Oracle(ORCL)$

Energy and inflation hedges:
$Energy Select Sector SPDR Fund(XLE)$, $Exxon Mobil(XOM)$, $Chevron(CVX)$, $Newmont(NEM)$

What did you do during the selloff?

A. Waiting for AI valuations to reset before buying
B. Rotating into packaging, foundry and order-backed suppliers
C. Adding energy, defense and gold exposure
D. Raising cash until oil and bond yields stabilize

Did you buy the dip last night, or reduce risk? How are you managing your AI positions now?

Disclaimer: This post is for market discussion only and does not constitute investment advice. Investing carries risk. Market data is based on the July 23, 2026 U.S. close.