AI could end Wall Street’s EPS obsession
Investors are focusing more on tangible results: cash flow.
Investors in the United States are shifting their focus from earnings per share (EPS) to cash flow (FCF) as AI transforms the landscape of US tech giants. While EPS remains a subject of debate due to its susceptibility to accounting gimmicks, Alphabet's recent report has highlighted the growing importance of FCF. The Google parent company, which reported a significant increase in earnings and revenue for Q2 2025, experienced a negative FCF for the first time since going public.
This shift in focus can be attributed to the asset-heavy nature of these hyperscalers, which have poured billions into physical infrastructure due to AI investments. While EPS still matters, the market's reaction to Alphabet's FCF demonstrates a growing recognition of its value in assessing corporate performance.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
