Alphabet and Tesla: What Big Tech’s Spending Means foPoland

Jacob Wirtschafter

Alphabet and Tesla have made very different bets in Poland. Google employs thousands of people and operates regional cloud infrastructure; Tesla is only beginning to move beyond car sales and charging.

Alphabet and Tesla reported second-quarter earnings this week as investors demanded clearer evidence that heavy spending on artificial intelligence would produce lasting profits. By Thursday’s close, the equal-weighted Magnificent Seven had moved from a modest year-to-date gain to roughly a 3 percent loss, while the S&P 500 remained up 8.2 percent. [Thursday, July 23.]
The sharp falls in Alphabet’s and Tesla’s share prices after their results brought the question into focus: when will rising investment produce comparable profits and cash generation?

Poland offers a useful test because it has already received substantial investment from one of the two companies.
Polish investors participate in these companies mainly through foreign-market funds rather than direct shareholdings. „Primary stock exposure of Polish retail investors is in GPW local stocks”, said Kamil Szczepański, an analyst at XTB, the Warsaw-listed brokerage. „There is, however, significant exposure to foreign, mainly US, markets through ETFs, mostly S&P 500 ones”. The effect, he said, is that index concentration leaves Polish investors „strongly exposed to the mainstream AI trade, but it’s more of an indirect exposure, with very little awareness of actual broad trends in the sector”. European investors, he added, still pick US assets „for raw performance, and as part of risk management, rather than actual belief in real or implied gains from the AI boom”. XTB says one in three investors in Poland uses its platform, making its clients a significant part of the country’s retail-investment market.

Alphabet: cloud growth and rising costs

Alphabet reported second-quarter net income available to common shareholders of $112.1 billion. That figure included $99 billion in gains on equity securities — principally stakes including SpaceX and Anthropic — which added $77.1 billion to net income after tax. Operating income from the company’s businesses was $40.8 billion.

Google Cloud showed substantial growth: revenue rose 82 percent to $24.8 billion, while cloud operating income more than tripled to $8.8 billion and its operating margin widened from 20.7 to 35.6 percent. Advertising revenue rose 14 percent to $81.6 billion, including 17 percent growth in search. Alphabet spent $44.9 billion on capital projects during the quarter, twice the year-earlier figure, and free cash flow fell to minus $5.9 billion. It also raised its full-year capital-spending forecast from $180–190 billion to $195–205 billion.

What matters in judging the returns, in Szczepański’s account, is less the headline size of the spending than its quality. „Whether it’s Alphabet or someone else, rather than size, the market values consistency and secure financing much more”, he said. „Cloud growth and margins are still imperative to the AI-based valuation premium”. Over time, he cautioned, „the market might start asking important questions regarding capacity to convert backlogs into revenue and margins, and how sustainable that might be”.

Google’s large Polish operation predates the recent government announcements. The company does not publish capital spending by country, so no portion of its $44.9 billion quarterly total can be assigned specifically to Poland. Google has operated in Poland since 2005, with offices in Warsaw, Kraków, and Wrocław and more than 2,000 staff in software engineering and AI research; its Warsaw site is the largest Google Cloud technology development center in Europe. It opened a Warsaw cloud region in 2021 — the first in Central and Eastern Europe. A Polish press report carried by Reuters put the investment at up to $2 billion, although Google has not confirmed that figure.
Google opened a second Kraków office in June, adding space for 300 employees working across cloud infrastructure, data analytics, Android, Chrome and Pixel. By contrast, the memorandum signed with the Polish Development Fund and OChK in February 2025 contained few quantified commitments. The government discussed the agreement alongside possible future investment worth billions of dollars, but Google’s only stated commitment was $5 million over five years for skills training. The frequently cited 8 percent figure estimated generative AI’s possible contribution to Polish GDP over a decade; it was not a forecast of the memorandum’s economic effect.

Google also faces regulatory pressure in the European Union. On Thursday, regulators fined it 890 million euros under the Digital Markets Act — 460 million for favoring its own services in search and 430 million for restricting app developers’ ability to direct users toward outside offers. The fine equals about 2 percent of Alphabet’s quarterly operating income. The company must also alter its search and Play practices within 60 days.

Tesla: narrow margins and a small Polish presence

Tesla was already the weakest-performing Magnificent Seven company this year, and its shares fell more than 14 percent on Thursday after the results. Revenue rose 26 percent to $28.2 billion, but automotive gross margin excluding regulatory credits was 16.3 percent and operating margin was 1.4 percent; adjusted earnings were $0.33 a share. Capital spending rose 142 percent to $5.8 billion, and free cash flow fell to minus $1.1 billion.

Szczepański was blunt about the valuation. „Tesla valuations are still completely divorced from reality, and the stock price revolves more around the storytelling of Elon Musk than fundamentals”, he said. „Whether investors like it or not, it’s still a car and EV company under heavy pressure from Chinese manufacturers — competition that is dragging margins from their 2022 peaks to where we are now”.

He sees genuine strengths: „Enormous cash-generating capacity is arguably the biggest ace, and that cash can be used to justify elevated valuations, or to fund investments with a bigger moat and margins than EVs”. The most promising directions, in his view, are chips and batteries — though, he noted, „due to PR and marketing, Elon might still opt for exposing the lackluster AI and robots the company offers”.

In Poland, Tesla’s presence is modest and, until recently, was limited to retail operations: Tesla Centers in Katowice, Poznań, Warsaw, and Wrocław, a temporary store in Gdańsk, and a Supercharger network. There is no vehicle plant; the Model Ys it sells in Poland are supplied from its Berlin-Brandenburg plant, the company’s only European vehicle factory. Battery-electric vehicles accounted for 5.3 percent of Polish passenger-car registrations in the first half of 2026 — 16,479 of 312,033 — compared with 20.7 percent across the EU. Poland had the bloc’s second-lowest share.

Tesla now has one Polish project beyond cars. In March, five Tesla Megapack 2XL units entered service at Łozienica in northwestern Poland, forming a 9.4-megawatt, 18.8-megawatt-hour battery installation developed by Slovenia’s NGEN. It is Tesla’s first Megapack deployment in Poland and the country’s first utility-scale battery connected directly to a distribution grid. The pilot does not amount to a manufacturing presence, but it gives Tesla an initial role in a storage market that Polish utility PGE plans to develop on a much larger scale.

Two different positions in Poland

Alphabet’s results matter more directly to Poland because the company already employs more than 2,000 people there and operates regional cloud infrastructure. This quarter’s cloud growth suggests that its spending is producing revenue and operating profit, even as the cost of expansion continues to rise.

For the ordinary Polish investor, none of it was really a choice. The exposure came bundled inside an S&P 500 index fund — real, as Szczepański notes, and largely unnoticed. Behind that fund stand two American companies at opposite ends of their commitment to Poland: Google, with a cloud region and several thousand engineers, and Tesla, with five battery units at Łozienica. One has been here long enough to be counted. The other has just arrived. 