Trump weighs ‘massive attack’ on Iran as Tehran’s chokehold on oil gets tighter

Good morning. On Fortune’s radar today:

AI is costing more money than it earns—and Wall Street hates it.

Markets: Buying the dip.

Are IPOs indicating we’re in a bubble? Yes and no.

White House preps ‘massive attack’ on Iran.

Meanwhile, Iran’s chokehold on oil gets tighter.  

Younger people are comfortable letting AI play with their money.

Japan’s new prime minister says she sleeps only ‘zero-to-three hours’ per night.

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AI is costing Big Tech more money than it earns—and Wall Street hates it

Alphabet made history on Wednesday, booking its most profitable quarter in corporate history—$112 billion in profit, the first 12-figure quarterly profit in history. Revenues in Google’s cloud computing business, the core of the company, soared 82%. 

So why did investors punish Alphabet, sending its shares down nearly 7%, the worst day since tariffs?

Because for the first time in the company’s history, Alphabet became cash flow negative, Fortune’s Eva Roytburg reports. On page 12 of its earnings presentation, Alphabet revealed that it was spending more on property and equipment than it was taking in from its operating activities, leaving it with $5.9 billion in negative free cash flow.

At least six firms cut their price targets for Alphabet in response, including Piper Sandler (to $395), UBS (to $379) and D.A. Davidson, whose $350 target was one of the most bearish on the Street.

After a bloodbath on Wall Street, traders are buying the dip

U.S. stocks took a sharp step down yesterday with the S&P 500 falling 1.21%. Asia followed suit and all the major indexes there saw losses this morning. But as the sun rose over Europe so did the mood of investors, who bid up stocks in the U.K. and the Stoxx 600 index in early trading. Likewise, U.S. futures ticked up a little this morning, suggesting that some investors think yesterday’s cull was overdone. 

S&P 500 futures were up 0.28% this morning. The index fell 1.21% yesterday. 

In Europe, the Stoxx 600 was up 0.51% in early trading and the U.K.’s FTSE 100 was up 0.36% before lunch.

Asia: South Korea’s KOSPI was down 5.72%. Japan’s Nikkei 225 was down 2.73%. India’s Nifty 50 was down 0.39%. China’s CSI 300 was down 1.67%. 

Brent crude was $97 per barrel this morning, down from a high of $102 yesterday.

It’s a record year for IPOs. Is it a bubble?

It’s likely going to be a record year for IPOs as measured by market cap, and the number of IPOs has only grown since 2020. But, Goldman Sachs asks, is the upturn in IPOs a sign that the stock market is heading into a bubble? (Look at the numbers for 1999 and 2000 in the left-hand chart below if you want to understand........

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