10 Best Cloud Computing Stocks to Buy Now

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 222

Global tech giant Alphabet Inc. (NASDAQ:GOOG) offers a wide range of products and platforms across various regions, including the United States, Europe, and Asia-Pacific. The company operates through three main segments one of which is Google Cloud. This segment caters to businesses, offering infrastructure, cybersecurity solutions, databases, analytics tools, and artificial intelligence (AI) services. It also includes Google Workspace, a suite of cloud-based communication and collaboration tools.

Alphabet Inc. (NASDAQ:GOOG) reported strong financial results for the first quarter of 2024, exceeding expectations.  Revenue reached $80.54 billion, reflecting a significant 15% year-over-year increase. Profitability also showed marked improvement. Net income rose significantly to $23.66 billion compared to $15.05 billion in Q1 2023. Earnings per share followed the positive trend, reaching $1.89, up from $1.17 in the previous year.

Analysts are positive on Alphabet Inc. (NASDAQ:GOOG), assigning a “Strong Buy” rating based on 38 recommendations in the past 3 months. The average 12-month price target for Alphabet Inc. (NASDAQ:GOOG) stock sits at $198.92, suggesting a potential upside of 8.29% from the current price levels.

Here’s what Weitz Investment Management said about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2024 investor letter:

“Mega-cap titans Meta Platforms, Alphabet Inc. (NASDAQ:GOOG) and Amazon generated outsized gains and were the Fund’s top relative contributors for the past 12 months. Following our valuation discipline, we continued to methodically rotate from more fully priced stocks to those trading at healthier discounts to our value estimates. We trimmed more tech-adjacent winners during the quarter, including Alphabet

Alphabet has been the most notable trim over the past two quarters. In effect, we removed the heavy overweight layer of the position size, which had been in the 6% to 8% range for most of the last five years. Part of the decision simply reflected valuation prudence after an exceptional period where the stock price ran well ahead of our estimate of business value growth. Some of it was a reality check that Google’s core search business may be less clearly unassailable than it appeared to be five to seven years ago. Our team also has adopted a healthy “prove it” approach to management/culture, capital allocation and future returns on a robust investment cycle. While Alphabet may no longer warrant standout overweight status, the stock remains one of the Fund’s largest holdings.”