Hey there, folks! It’s that exhilarating time of year we all look forward to. No, I’m not talking about the holidays or anything seasonal — I’m referring to earnings season! Fortunately for us, this thrill comes around four times a year, and for those of you signed up to my service, well, you already know how crucial it is.
During earnings season, things tend to be a bit more on point, with the market, for once, acting rationally. Companies that show solid fundamentals, increasing sales, and rising profits are rewarded, while others … let’s just say, they face the music.
Thankfully, through my premium services, we focus on top-notch companies, supported by prominent institutional buying. While we don’t always hit the jackpot, moments like this are when our stocks usually shine.
This time around, investors are looking for more than just good performance; they want decisive leadership from companies. And who better to represent that than the illustrious Magnificent Seven stocks?
Right after the market closed on Wednesday, we got updates from two of these giants: Alphabet, Inc. (GOOGL) and Tesla, Inc. (TSLA).
As their earnings reports loomed, people were on edge. How is Alphabet keeping up in the AI race against other tech heavyweights? And would Tesla’s much-hyped Robotaxi finally deliver on Elon Musk’s big promises? Most importantly, how has their performance catered to the leadership investors are eager for?
We’re here to dissect Alphabet’s and Tesla’s earnings in today’s Market 360, after which we’ll use a handy tool from my buddies at TradeSmith to determine whether now’s the time to invest.
Alphabet, Inc.
Before the earnings call, Wall Street was buzzing with speculation about ongoing antitrust troubles and fierce competition in AI potentially hitting Alphabet hard.
However, Alphabet did not disappoint, at least with their main figures. They reported adjusted earnings per share of $2.31, exceeding predictions of $2.18. Their revenue hit $96.43 billion, climbing above Wall Street’s estimated $94 billion, showcasing a fantastic 14% growth year-over-year.
Each of Alphabet’s divisions demonstrated strength, too — like YouTube ad revenue coming in at $9.8 billion, which was more than the anticipated $9.56 billion.
The highlights, though, put the spotlight on Alphabet’s bold moves in AI.
The Google Cloud segment raked in $13.62 billion, surpassing projections of $13.11 billion, with a staggering 32% increase. Remarkably, this division secured more billion-dollar contracts in the first half of 2025 than in all of 2024, boasting a backlog worth $106 billion.
Additionally, Gemini, Alphabet’s premier AI platform, now has over 450 million users, with usage surging by over 50% since Q1. Meanwhile, the new AI video tool from Google, Veo3, already churned out 70 million videos in just two months — pretty impressive!
No surprise here that Alphabet has bumped its AI investments up to an astonishing $85 billion from the previously forecasted $75 billion, clearly setting itself up to compete aggressively with Microsoft Corporation (MSFT) in the AI market.
You’d think all this great news would send their stock soaring, but it took a bit of a dip after the AI spending announcement. Still, market rationality kicked in, and the shares bounced back once it dawned on investors that you need to spend to profit — and Alphabet’s AI investments appear to be paying off.
Tesla, Inc.
Next up is Tesla.
As the earnings call approached, investors were anxious. With decreasing auto revenues, fewer vehicle deliveries, and shrinking regulatory EV tax incentives on the table, the expectations were high.
I won’t even start on the continuous worries surrounding CEO Elon Musk and whether his recent antics and concerns regarding reputation might haunt the company.
Alas, Tesla didn’t put any soothing balm on these fears.
They showed adjusted earnings per share at $0.40, but revenue took a dip of 12% year-over-year, falling to $22.5 billion. While earnings aligned with expectations, revenue didn’t quite hit analysts’ forecast of $22.64 billion.
A closer look reveals that auto sales dropped for the second consecutive quarter, with a 16% slide to $16.7 billion. Meanwhile, vehicle deliveries fell 14% to 384,000 units.
Perhaps starkest was income from selling regulatory credits that plummeted from $890 million last year to just $439 million. On the earnings call, Musk bluntly mentioned that without regulatory credits — as affected by President Trump’s recent policy changes — Tesla could be facing ‘a few rough quarters’ ahead.
No official forward-looking guidance either led to an 8% drop in stock prices after the announcements. But Tesla did have some glimmers of hope for investors.
The company kicked off production on a more affordable vehicle model in June, planning for broader production in the latter half of 2025. The robotaxi is still being rolled out for beta tests in various cities and is on track for mass production in 2026.
Are Alphabet and Tesla Worth It?
Now that we’ve broken down the results, it’s clear Alphabet showed greater leadership than Tesla. You’re probably thinking Alphabet might be the wiser investment choice, right?
But the pressing inquiry is: Is this truly the ideal moment to enter?
To settle this argument, I utilized TradeSmith’s new seasonality tool.
In essence, this tool adeptly identifies stocks that tend to soar on specific calendar dates based on trading data from over 5,000 companies.
They call it the ‘Green Day’ system, and it’s shown incredible results with an 83% success rate during testing.
Taking a glance at Alphabet’s chart, you’ll notice it just stepped out of a batch of ‘green days’ from May 24 to July 23, boasting an average gain of 6.85% with perfect accuracy.
However, GOOGL is entering a seasonal period likely to see declines as indicated in the red zone on the chart, with the next ‘green day’ not appearing until December.
Now, turning to Tesla’s chart, it reveals that it just emerged from a robust stretch of ‘green days’ with an average return of 24.35% — also with perfect accuracy.
Although there are a few more ‘green days’ forthcoming for Tesla, none are anticipated to be as formidable as the recent one. The next significant opportunity is coming up in September. If you’re a trader on the lookout for promising gains, this might be a signal to keep TSLA on your radar.
How to Utilize This Tool for Your Advantage
If you’ve been part of my updates, you know I’ve been a fan of TradeSmith’s seasonality tool.
Sure, I could litter this section with screenshots. But let’s be real, the tool’s effectiveness is easier to appreciate when you see it working firsthand.
I’ve been devising models that outperform the market since the 1970s and was even d the ‘King of Quants’ way back when. But today, the tech landscape is brimming with various tools and systems.
Yet, I must say, TradeSmith’s seasonality tool stands out like no other I’ve seen during my 50-year journey.
I highly encourage you to check out the incredible potential of this tool for yourself by clicking here now.
Cheers,
Louis Navellier
Editor, Market 360
