13 NASDAQ Stocks with the Highest Upside Potential

7. Alphabet Inc. (NASDAQ:GOOGL)

Average Upside Potential as of April 8: 49.91%

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL) operates through Google Services, Google Cloud, and Other Bets segments. Google Services offers products and services like ads, Chrome, Google Drive, and Google Maps. Google Cloud offers AI infrastructure, Vertex AI platform, cybersecurity, and data & analytics for enterprise customers. The Other Bets segment sells healthcare-related and internet services.

Ken Gawrelski of Wells Fargo maintained an Equal Weight rating on the company on March 31 while reducing the price target from $184 to $167 due to caution surrounding the market because of the current macroeconomic environment. The analyst also believes that Google’s search business could potentially be disrupted by emerging technologies, like AI.

However, the company now processes over 5 trillion annual searches, up from 2 trillion in 2016. Such improvements are fueled by AI features like Circle to Search and AI Overviews. Circle to Search lets you search for anything on your screen by circling or scribbling on it. AI overviews are AI-generated summaries that appear at the top of Google search results and provide quick answers to queries. Alphabet Inc. (NASDAQ:GOOGL) is also testing Gemini 2.0 in search results and focusing on voice, camera, and visual search to integrate advanced AI in its offering.

Due to its growth in Search and Cloud, and the company’s AI potential, Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) 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.”