4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOGL) is yet another big tech name on our list. One of the main reasons its being added to this list is because of its current position as a leader in the AI space and its potential to retain this position.
In the first half of 2024, Alphabet Inc. (NASDAQ:GOOGL) delivered exceptional results with revenue growth at 14%. The primary reasons for this growth included not only the increasing adoption of AI automation tools but also the fact that Alphabet Inc. (NASDAQ:GOOGL) occupies a dominant position in the digital advertising market. The company is being bought up by investors considering its numerous milestones in AI product development as well. For instance, at Alphabet Inc.’s (NASDAQ:GOOGL) annual developer conference this May, the company unveiled its “AI Overviews,” which are AI-powered summary responses for queries. This represents an immense step forward in AI integration within Alphabet Inc.’s (NASDAQ:GOOGL) Search business, which is its key revenue growth catalyst, and is one of the many reasons why investors are purchasing Alphabet Inc. (NASDAQ:GOOGL) stocks today.
Alphabet Inc. (NASDAQ:GOOGL) was found in the portfolios of 216 hedge funds in the second quarter, with a total stake value of $35.3 billion.
Here’s what Pershing Square Holdings said about Alphabet Inc. (NASDAQ:GOOGL) in its first-half 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, delivered stellar business results in the first half of 2024. Revenues grew 14% powered by Google’s dominant position in the fast-growing digital advertising market as well as certain company-specific tailwinds including the increasing adoption of AI automation tools by advertisers and YouTube’s continued success in the Connected TV Medium. Strong revenue growth coupled with cost control initiatives and stable staffing levels (headcount has remained flat year-to-date), resulted in strong operating leverage. Operating profit margins expanded approximately 340 basis points, excluding one-time severance and real estate charges. In the second quarter, the company’s Cloud segment outpaced its major competitors with 29% revenue growth and achieved 11% profit margins, after first reaching profitability just 18 months ago.
Amidst solid financial performance, Google is achieving notable milestones in its AI product development roadmap. At its annual developer conference in early May, the company unveiled the broad rollout of “AI Overviews”, which are AI-powered summary responses for certain types of queries. Early results from AI Overviews highlight how thoughtful integration of AI into Search not only improves the user experience, leading to more frequent and detailed queries, but also creates opportunities for greater ad monetization through context-rich responses and higher conversion rates…” (Click here to read the full text)
