12 Best QQQ Stocks to Invest in Now

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL) is a technology company that offers products and platforms through its Google Services, Google Cloud, and Other Bets segments. Google Services provides popular tools like Search, YouTube, and Android, while Google Cloud delivers AI infrastructure and enterprise solutions.

On March 5, BofA reiterated a Buy rating and a $225 price target on the company. This sentiment came from the company’s disclosure that it now processes over 5 trillion annual searches, up from 2 trillion in 2016. Google’s search volume has a 12% CAGR from 2016 to 2024, while the money it makes from those searches has a 19% CAGR. BofA suggests that the company’s search revenue growth comes from increased usage and monetization. This huge amount of search data will also help Google’s AI get better.

AI features like Circle to Search and AI Overviews are driving this improvement in the segment, especially among younger users. Circle to Search lets you search anything on your screen by circling, highlighting, or scribbling on it. AI overviews are the AI-generated summaries that appear at the top of Google search results, which provide quick answers to queries. Visual searches via Lens are also a major contributor, with over 20 billion monthly queries. Alphabet Inc. (NASDAQ:GOOGL) is testing Gemini 2.0 in search results and focusing on voice, camera, and visual search.

Alphabet Inc.’s (NASDAQ:GOOGL) strong Q3 earnings, particularly in its growing cloud division driven by AI demand, made it the Oakmark Equity and Income Fund’s top contributor. The fund has continued confidence in its long-term AI-driven value and stated the following in its Q4 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”