Concerns about artificial-intelligence spending shaved roughly $890 billion in market value from the Magnificent Seven on Thursday. Wall Street is reckoning with a new reality: The biggest tech companies are no longer cash-printing machines.

Alphabet's shares slumped some 7%, costing the company more than $293 billion in market value, its largest one-day market-cap loss on record. Tesla tumbled 15%, the stock's worst post-earnings performance ever. The selloff extended to other tech stocks: Meta Platforms fell 3.4%, and Oracle slid 4.6%. The Nasdaq composite lost 2.2%.

Both companies reported soaring revenue, but investors zeroed in on their AI spending. Alphabet's free cash flow came in at negative $5.9 billion—the first negative print since the company went public in 2004. Its finance chief said free cash flow would remain under pressure as the company deepens investments in AI. Alphabet also lifted its capital spending forecast to as much as $205 billion this year.

Meanwhile, Tesla is spending big on its pivot toward autonomous vehicles and robotics. That includes building a chip-manufacturing facility called Terafab, which Tesla is developing in partnership with Intel and Elon Musk's rocket company, Space X.