Alphabet () reports earnings after today’s close, and Intel () follows tomorrow. Together, they provide a first clue as to whether AI-related spending and investment continue at the brisk pace of the prior quarters.
Alphabet represents the demand side for AI models. Google’s Cloud backlog nearly doubled sequentially last quarter to a record $462 billion, growing 63% year over year, the fastest pace among major cloud providers. That backlog is one important reason Alphabet and the other hyperscalers continue to allocate hundreds of billions of dollars to build out data centers.
The problem, however, with their massive spending is declining free cash flow. Alphabet raised 2026 capex guidance to $180 to $190 billion and told investors 2027 spending will “significantly increase,” despite free cash flow declining 47% year over year in the first quarter to just $10.1 billion (shown below). Watch whether Google Cloud’s margin expansion continues and for any changes to capex guidance.
Intel represents the supply side of AI investment. Data center and AI revenue grew 22% last quarter as demand for its products increases and chip efficiency improves. Watch revenue and forward guidance for signs on whether AI investments from the largest companies continue to expand rapidly or if declining free cash flow is slowing capex investments.
Fed Speakers
None scheduled. The FOMC is in its pre-meeting blackout ahead of the July 28 to 29 meeting, so there are no Fed voices to move the tape this week.
Nike
Nike () has lost roughly 65% of its value since its November 2021 peak. With the stock trading near a decade low, and full-year revenues of $46.4 billion essentially flat on a reported basis, the question is whether Nike stock is an opportunity or a trap. To help answer the question, we provide a SWOT analysis below.
Strengths:
Nike remains the world’s most recognizable athletic brand with unmatched global distribution. Its dividend has grown an average of 11% annually over the past decade and remains well covered by earnings and cash flow. Nike’s new CEO Elliott Hill is trying to execute a turnaround. This includes returning to wholesale and sport-focused marketing. Wholesale revenues grew 4% in Q4, an early signal his efforts may be working.
Weaknesses:
Nike Direct revenues fell 7% in Q4 and 9% on a currency-neutral basis. Its gross margin compressed 1.3% to 40.2% in Q3 as discounting to clear excess inventory continues to pressure profitability. Revenue from China remains a persistent drag.
Opportunities:
EPS is forecast to grow 60% over the next three years as the turnaround takes effect. The 2026 FIFA World Cup gave Nike a rare global marketing moment with 12 national team sponsorships. The average analyst price target of $59.58 implies nearly 40% upside.
Threats:
Newcomers like On Holding and Hoka are taking market share in the premium performance footwear sector. Tariff uncertainty creates ongoing margin risk. Furthermore, there is speculation that Nike could be removed from the Dow Jones Industrial Average, a symbolic blow that would trigger passive fund selling.
At $41, Nike is priced for continued failure. The question is whether Hill’s turnaround is fast enough to outrun the competition, which is gaining ground every quarter.
The graph below is from our “soon-to-be-released” SimpleVisor AI. 
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