4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, is a tech giant known for its innovative products and services. While its search engine is used by almost everyone every day, it’s also known for YouTube videos, Gmail, and Google Maps. Beyond these, it’s investing heavily in AI and self-driving cars. It’s also exploring other futuristic technologies like quantum computing.
Q3 2024 was a strong quarter and the company recorded a revenue of $88.27 billion, up 15.09% as compared to the year-ago period, driven by AI innovations. The company is investing heavily in infrastructure, including data centers, chips, and clean energy, to support its AI efforts. Its Gemini model, a multimodal AI model, is rapidly gaining traction, and it’s committed to bringing AI to the real world, with projects like Project Astra aiming to deliver AI-powered experiences by 2025. This project aims to create a more interactive experience by blending the features of Google Assistant and Gemini.
It recently formed a multi-billion dollar strategic partnership with Vodafone Group to bring Google Cloud, AI, Android, ads, and digital services to over 330 million customers across Europe and Africa. The company’s impressive financial performance highlights its ability to capitalize on emerging trends. With a strong foundation and a focus on innovation, Alphabet Inc. (NASDAQ:GOOGL) is well-positioned for continued success.
Cooper Investors Global Equities Fund (Hedged) stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2024 investor letter:
“Alphabet Inc.’s (NASDAQ:GOOGL) operating performance remains strong with sales growing 14% in the most recent quarter. Highlights included the ongoing secular growth of digital advertising driving Google search (+14%), YouTube’s continued success as a leading content platform (+13%) and the performance of the Cloud business (+29%). In conjunction with this strong sales momentum, Alphabet’s increased focus on expenses is delivering margin expansion such that Operating Income grew 26%.
Despite this operational momentum, Alphabet’s share price declined 11% in the quarter as a federal judge ruled against the company in its case with the US Department of Justice. The case pertains to Google’s monopolisation of both the search and digital advertising markets which is claimed to limit competition and innovation and/or in
Potential remedies include prohibiting exclusive agreements which make Google the default search engine on Apple or Samsung devices, forcing Alphabet to share its advertising technology with rivals, or in the extreme breaking the company apart. The timing and outcomes remain somewhat uncertain however we remain of the belief that at the fundamental level Alphabet’s products are best of breed across several verticals and are benefitting from secular industry trends and that these factors will be the ultimate determinant of long-term shareholder returns.”
