1. Alphabet Inc. (NASDAQ:GOOGL)
% of shares shorted: 0.56%
Alphabet is a consolidation of successful businesses. The company has developed into a true technological giant, producing tens of billions of dollars in free cash flow annually, with products ranging from advertising to cloud computing and self-driving automobiles. Even though the US-based tech company’s major search business has been the subject of antitrust worries, investors are still confident in the firm’s overall strength and expect the company to continue leading several markets, including search, artificial intelligence, cloud computing, and video.
According to a UBS research, Alphabet Inc. (NASDAQ) is a major participant in AI, with the Gemini project boosting intelligence and Tensor Processing Units (TPUs) and Google Cloud serving as enablers. As a result, the company will be poised to profit from the anticipated $1.2 trillion AI market by 2027.
To encourage suppliers to source all of their energy from renewable sources by 2029, GOOGL introduced the Google Renewable Energy Addendum. This aligns with Google’s 2030 objective of net-zero emissions and a 50% decrease in Scope 1, 2, and 3 emissions over 2019 levels.
Alphabet Inc. (NASDAQ:GOOGL) reported impressive Q2 2024 results, with diluted EPS growing 31% and revenue rising 15% year over year. Google Cloud Platform (GCP) showed growth of around 29% YoY, solidifying its dominance in the cloud market.
Patient Capital Opportunity Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q2 2024 investor letter:
“Alphabet Inc. (NASDAQ: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.”
The tech behemoth has hedge fund sentiments of 216 in Q2 2024. Ken Fisher’s Fisher Asset Management is the largest shareholder in the firm, with 48,620,515 shares worth $8.86 billion.
While we acknowledge the potential of the 13 Best American Tech Stocks To Buy According to Short Sellers, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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