Hi there, this is your daily ☕️ Finpresso.
In today's newsletter:
💸 Alphabet's cash flow turned negative on AI
🚗 Tesla profit misses as costs rise
📉 Fed's Warsh warns inflation fight isn't over
🚢 Houthis strike two Saudi oil tankers in Red Sea
💳 Revolut hits $115B valuation
Plus: 🌍 7 macro news, 🏢 10 corporate news, 💰 7 deal flow, and 📑 6 research & reports.
| 💸 Alphabet's cash flow turned negative on AI LINK |
- Alphabet's Google burned through more cash than it generated last quarter, reporting negative free cash flow of $5.9 billion — its first negative reading in decades — as spending on AI data centers and hardware outpaced its income.
- The company raised its 2026 capital-spending forecast to $195 billion–$205 billion, up from $180 billion–$190 billion, and its finance chief said outlays will rise "significantly" in 2027, part of a broader $700 billion-plus AI push across Google, Amazon, Microsoft, and Meta.
- Analysts say each dollar now buys less capacity because of higher memory-chip and materials costs, and investors likely expect Google's cash flow to stay negative for some time even as revenue keeps growing; Tesla also reported negative cash flow on AI spending Wednesday.
| 🚗 Tesla profit misses as costs rise LINK |
- Tesla's adjusted profit came in at 33 cents a share last quarter, well below the 51 cents analysts expected, as rising costs overshadowed strong car sales and unsettled investors betting on its robotics and AI ambitions.
- Operating costs jumped 47 per cent to US$4.35 billion while vehicle prices fell, and the company burned through US$1.09 billion in cash — its first negative free cash flow in more than two years, sending shares down 2.4 per cent.
- Capital spending of US$5.8 billion tracks toward roughly US$17 billion this year, below Musk's US$25 billion target, prompting an analyst to call the pullback "puzzling" given how much Tesla's future depends on AI investment.
| 📉 Fed's Warsh warns inflation fight isn't over LINK |
- Federal Reserve Chair Kevin Warsh signaled the inflation fight is far from over, declining to celebrate June's cooldown and leaving the door open to interest rate hikes despite record highs across the Dow, S&P 500, and Nasdaq.
- Trailing 12-month inflation eased to 3.5% in June from a three-year high of 4.2% in May as crude prices fell on U.S.-Iran peace talks, but it has now topped the Fed's 2% target for 63 straight months.
- Warsh's caution reflects core inflation (which strips out food and energy) staying stubborn, suggesting the price pressure has spread beyond fuel; higher borrowing costs could threaten debt-financed AI data-center spending and stretched growth-stock valuations.
| 🚢 Houthis strike two Saudi oil tankers in Red Sea LINK |
- Yemen's Houthis said they hit two Saudi Arabian oil tankers, the Encelia and Layla, with drones and missiles in the Red Sea, threatening to open a new front in the escalating Middle East conflict.
- The strikes, if confirmed, mark the first since the Iran-backed group declared a naval blockade against Saudi Arabia, coming as the U.S. completed its 12th consecutive night of strikes on Iran.
- Saudi Arabia's state press agency confirmed the Encelia was hit while transiting the Red Sea, causing a fire at the bow with all crew safe, while a separate maritime report cited a projectile strike about 130 kilometers off Al Shuqaiq.
| 💳 Revolut hits $115B valuation LINK |
- Digital bank Revolut has been valued at $115 billion in a share sale, a 53% jump in under a year that makes it Europe's most valuable private company and lifts it above rivals like Barclays.
- The deal priced shares at $2,017 each and let employees and existing investors cash out rather than raise new money, though the transaction's size was not disclosed, unlike Barclays' publicly traded $95 billion market value.
- Backing the valuation, Revolut reported $2.3 billion in pre-tax profit for 2025, up 57%, as revenue rose 46% to $6 billion and its customer base passed 75 million.
🌍 Macro News
- Nvidia's Huang urges US to embrace, not ban, Chinese open-source AI models. LINK
- Kakao and Circle agree to build payment infrastructure for won-backed stablecoins. LINK
- South Korea's economy grew 0.6% in Q2, beating forecasts on chip exports. LINK
- Trump approves 30-year US-Saudi civil nuclear cooperation deal worth billions. LINK
- US Treasury yields rose with oil prices ahead of jobless claims data. LINK
- S&P and Pantera launch crypto index ranking blockchains by protocol revenue. LINK
- Automakers and Bosch urged UK to scrap its 2035 petrol car ban. LINK
🏢 Corporate News
- ServiceNow's subscription revenue rose 25% to $3.9 billion, beating estimates. LINK
- AMD to invest up to $5 billion in AI firm Anthropic. LINK
- BitMEX, pioneer of perpetual swaps, will shut down operations in September. LINK
- OpenAI plans a Georgia data center complex costing over $30 billion. LINK
- EU regulators approve Paramount Skydance's acquisition of Warner Bros. LINK
- Segro backs Prologis's £14 billion takeover, London's biggest buyout this year. LINK
- Monday.com cuts 630 jobs, 20% of staff, to focus on AI platform. LINK
- EasyJet's quarterly profit fell 70% on higher fuel costs and weak bookings. LINK
- Google Cloud revenue jumped 82% to $24.8 billion on AI demand. LINK
- White House accuses China's Moonshot of copying Anthropic's AI technology. LINK
📈 Stocks
💰 Deal Flow
- Travis Kalanick's robotics firm Atoms raises $1.7 billion led by a16z. LINK
- TE Connectivity beats earnings estimates, buys Astrodyne TDI for $1.4 billion. LINK
- AI cybersecurity startup Glow launches with $1.2 billion valuation, Sequoia-led funding. LINK
- Genius AI raises $44 million Series D at $1.15 billion valuation. LINK
- Startup Arrakis emerges from stealth with $38 million raised, Blossom-led round. LINK
- Brookfield to buy battery-storage firm Aypa Power from Blackstone. LINK
- NovaGold to buy remaining Donlin Gold stake, forming $4.2 billion NovaGold Corp. LINK
📑 Research & Reports
- Nvidia's new Vera Rubin AI rack offers 5.4x inference performance gain. LINK
- Morgan Stanley calls recent memory-chip selloff a buying opportunity. LINK
- Franklin Templeton says agentic AI will drive blockchain's next big use case. LINK
- Deutsche Bank says China's humanoid robot production forecasts are accelerating fast. LINK
- Bitcoin's rebound faces key resistance near $69,000, Glassnode reports. LINK
- RBI says India's financial system remains stable and shock-resistant. LINK