3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Among the top 3 video game stocks to invest in now, we have Alphabet Inc. (NASDAQ:GOOG), the company that pioneered cloud-based gaming when it launched the Google Stadia back in late 2019. Alphabet Inc. (NASDAQ:GOOG) removed the need to own a gaming console with Google Stadia, which allows users to play video games on screens they own over the internet, without having to install, download, or update them.
This April, Rosenblatt analyst Barton Crockett initiated coverage of Alphabet Inc. (NASDAQ:GOOG) with a Buy rating and a $4,183 price target. The analyst sees the company as well-positioned to benefit from its dominance in the cloud services market.
Alphabet Inc. (NASDAQ:GOOG) is a top stock pick among elite hedge funds. At the end of the fourth quarter of 2021, 158 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) with collective stakes worth $36.62 billion. This is compared to 156 positions in the third quarter of 2021 with stakes worth $34.95 billion.
Chris Hohn’s TCI Fund Management owned more than 2.9 million shares of Alphabet Inc. (NASDAQ:GOOG) at the end of last December, making it the largest stakeholder in the company. This amounts to a stake value of $8.5 billion which covers 19.22% of the fund’s Q4 2021 investment portfolio.
Here is what Ensemble Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its first-quarter 2022 investor letter:
“Google (6.6% weight in the Fund): Google is one of the most extraordinary businesses of the digital age. Its mission is “to organize the world’s information and make it universally accessible and useful.” This is such a broad organizing principle for a company whose value is built on doing just that. When you think about the mass adoption of the Internet, smartphones, social and digital media, and e-commerce among billions of users every day, and the exponential growth of data that has brought, we all know how valuable Google’s role in collecting, organizing, and filtering all that information has become in our daily lives.
NVidia’s CEO Jensen Huang put the challenge really well in an interview with Tech Analyst Ben Thompson recently:
“We know that there are a trillion things on the Internet and the number things on the Internet is large and expanding incredibly fast, and yet we have this little, tiny personal computer called a phone… how do we possibly figure out of the trillion things in the internet what we want to see on our little tiny phone?
Well, there needs to be a filter in between… basically an AI, a recommender system. A recommender that figures out based on the nature of the content, the characteristics of the content, the features of the content, based on your implicit and your explicit [preferences], find a way through all of that to predict what you would like to see.
I mean, that’s a miracle! That’s really quite a miracle to be able to do that at scale for everything from movies and books and music and news and videos and you name it.”
While Huang was talking about the role of artificial intelligence more generally amidst the data explosion, it’s hard not to think of Google as most fitting the role of the Internet’s leading “recommender system,” with its de facto role as the gateway to the Internet. In fact, it’s no coincidence that Google is a leader in AI technology, which it applies across most all of its services…” (Click here to see the full text)
