5 Cheapest Stocks on Robinhood

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 153

Alphabet Inc. (NASDAQ:GOOG) shares have declined almost 40% year to date given slowing growth and a weak ad market. Alphabet Inc. (NASDAQ:GOOG) also faces potential competition from TikTok. Nevertheless, Alphabet Inc. (NASDAQ:GOOG) has a lot of potential in terms of developing AI applications such as Waymo. Alphabet Inc. (NASDAQ:GOOG) continues to dominate search, which could help the company continue to grow in the future. Mayar Capital mentioned Alphabet Inc. (NASDAQ:GOOG) in a Q3 investor letter,

“Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.

Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…”