6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is an American technology giant headquartered in Mountain View, California. It owns a wide range of products and platforms, such as Google Search, Google Maps, Google Cloud, Gmail, Chrome, YouTube, and more. It is one of the world’s largest tech companies by revenue.
According to Insider Monkey’s database, 165 hedge funds had stakes in the company as of Q2 2024, making it one of the best NASDAQ stocks to invest in right now. During the second quarter of the year, the company reported EPS of $1.89, beating expectations of $1.85 per share. Consolidated revenues totaled $84.7 billion, up 14% year-over-year. Net income was recorded at $23.6 billion. These robust results were led by a strong performance from Google Search and Google Cloud.
Alphabet Inc. (NASDAQ:GOOG)’s Cloud business crossed the $10 billion quarterly revenue mark for the first time and posted $1 billion in operating profit – which was also a first. Revenues within Google Services reached $73.9 billion, up from $66.2 billion during the same quarter in 2023. The ‘Google Search & Other’ segment revenue totaled $48.5 billion, while YouTube and Google Network generated $8.7 billion and $7.4 billion, respectively, in revenues during the quarter. These results reflect the fast pace of growth in the company and have helped garner investor confidence. The London Company Large Cap Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
Alphabet Inc. (NASDAQ:GOOG) – GOOG was a top performer this quarter as it reported strong Search revenue, tighter cost controls, and momentum in Cloud. Both direct and brand Search ads were better than expected and the strength in YouTube monetization continues. Expense controls have translated to 700bps of margin improvement. Management is removing layers to improve efficiency, which should drive margins higher. GOOG also provided details on paths to monetize Al for advertisers. GOOG initiated a dividend during the quarter to return additional cash to shareholders. It has a solid balance sheet, a significant market share, and generates strong returns.
The future outlook for the company looks solid, with consensus among analysts on the stock’s Buy rating. It also has a share price target of $198, representing a 21% upside from its current level. There are also reports of Alphabet Inc. (NASDAQ:GOOG) negotiating a $23 billion acquisition of Wiz, a cybersecurity firm, that offers AI automation of tasks, threat detection, and vulnerability analysis. If the deal goes through, it will open the doors for the company in the cloud-native security arena by boosting its Mandiant cybersecurity platform.
However, a recent defeat in an anti-trust lawsuit, where the Federal Court judge called Alphabet a ‘monopoly’ has come as a setback for the company. Judge Amit Mehta ruled that Alphabet stifled competition in the online search market to maintain its monopoly. This has led to some bearish sentiment around the stock, as it has hurt the company’s reputation and can also result in billions of dollars in hefty fines or legal settlements.
