10 Best Stocks To Buy Right Now According To Billionaire Cliff Asness

7. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders In Q2 2024: 216

AQR Funds’ Latest Investment Stake: $504.9 million

Alphabet Inc. (NASDAQ:GOOGL) is the holding company for Google and other businesses. Its primary line of revenue is the Search business, which accounts for 58.6% of the firm’s revenue as of Q2 2024. This means that Alphabet Inc. (NASDAQ:GOOGL) remains highly dependent on Search, and any troubles for the business could create tailwinds. In 2024, the firm saw some such troubles, after a historic court ruling sided with the DOJ by stating that Search was abusing its market dominance. Additionally, the rise of AI could lead to AI based search that might eat market share away from Alphabet Inc. (NASDAQ:GOOGL). However, on the AI front, it is one of the strongest firms in the world. Alphabet Inc. (NASDAQ:GOOGL) designs its own tensor processors for AI use and also has access to a foundational model via Bard. These enable to provide AI training capacity to others, such as Apple, and allow businesses to build their AI products through the Google Cloud business.

Patient Capital Management mentioned Alphabet Inc. (NASDAQ:GOOGL) in its Q2 2024 investor letter. Here is what the firm said:

“Alphabet Inc. (GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”