We recently published a list of Mark Cuban Stock Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against other top stock picks from Mark Cuban’s portfolio.
Mark Cuban is a well-known entrepreneur and television personality, recognized for his diverse business ventures and outspoken presence in the sports and entertainment industries. He was the principal owner of an NBA franchise, the Dallas Mavericks, of which he now serves as a minority owner. Raised in Pittsburgh, Pennsylvania, Cuban showed an entrepreneurial spirit from a young age. At age 12, he sold garbage bags to afford a pair of expensive sneakers after which, at 16, he capitalized on a newspaper strike by transporting newspapers. Later, he enrolled at the University of Pittsburgh before transferring to Indiana University’s Kelley School of Business, where he earned a degree in management in 1981.
Cuban started his career at Mellon Bank, where he developed an interest in technology and networking. After being fired from his sales job in a software retailer, he founded MicroSolutions, a company specializing in system integration and software reselling. Under his leadership, the company flourished, generating over $30 million in revenue before Cuban sold it to CompuServe for $6 million in 1990, netting approximately $2 million after taxes. Cuban’s success continued with Audionet, a company he co-founded in 1995 alongside Todd Wagner. Audionet evolved into Broadcast.com, growing rapidly and generating millions in revenue. In 1999, at the height of the dot-com boom, Yahoo! acquired Broadcast.com for $5.7 billion in stock.
Over the years, Mark Cuban has invested in various industries, including social software, networking, entertainment, sports, and cryptocurrency. He was an early investor in IceRocket, a blog search engine, and backed companies like RedSwoosh, Weblogs, Inc., and Goowy Media. In 2005, he experimented with a new business model for online journalism through Sharesleuth.com and later launched Bailoutsleuth.com for government oversight. Cuban also ventured into film distribution with Magnolia Pictures and invested in Motionloft, a storefront analytics company. His Shark Tank investments since 2011 total nearly $20 million, with mixed success. In 2022, he launched Cost Plus Drugs to lower prescription prices and disrupt the U.S. healthcare industry. His sports ventures include owning the Dallas Mavericks from 2000 until selling a majority stake in 2023. Cuban has also been active in cryptocurrency, accepting Dogecoin for Mavericks merchandise and tickets.
Mark Cuban’s investment philosophy is centered on discipline, frugality, and informed decision-making. He emphasizes “living like a student” in the early years to build a financial cushion, saving at least six months’ income before investing in low-cost index funds. Cuban strongly discourages credit card debt due to high interest rates, advocating for cash or debit card use instead. He also promotes strategic spending by negotiating prices and buying essentials in bulk when discounted. For more experienced investors, Cuban suggests deep expertise in a particular domain and holding cash until a unique opportunity arises, rather than following conventional buy-and-hold strategies. Ultimately, his approach prioritizes financial discipline, smart spending, and long-term investing for steady wealth growth.
The outspoken tech mogul has a well-defined investment strategy focused on generating wealth through smart, long-term decisions. He favors dividend-paying stocks, referring to them as “real-world value generators,” emphasizing their ability to provide steady income rather than relying solely on price appreciation. In the rapidly evolving AI sector, Cuban sees massive potential, believing that AI will be essential for every company’s survival. Comparing AI investments to buying Apple stock in the 1980s, he considers them the future of passive wealth. As he puts it, “Non-dividend stocks are basically baseball cards. But AI? That’s a whole different game.”
Cuban also acknowledges the high-risk, high-reward nature of cryptocurrency investments but warns investors to be cautious. He advises only investing in what one can afford to lose and focusing on cryptocurrencies with real-world applications. His stance is clear: “If you’re not a true adventurer, stay away.” For those seeking a more stable approach, he recommends the broader market, which has historically delivered reliable returns of around 10% annually. Additionally, his involvement with private companies through “Shark Tank” highlights the potential of venture capital, though he recognizes that most investors may need to turn to crowdfunding or venture funds to access similar opportunities.
Our Methodology
The stocks listed below were picked from the public comments that Cuban has made on his investments. He has explicitly mentioned some of his private holdings during these public appearances while only alluding to others. However, based on a careful assessment of the comments, the stocks listed below largely align with his investment philosophy. The list is compiled in descending order of the number of hedge funds having stakes in each firm, which was derived using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders as of Q4: 234
In October 2024, Mark Cuban praised Alphabet Inc. (NASDAQ:GOOG)’s AI model, Gemini, emphasizing its ability to integrate seamlessly across Google Workspaces and continuously learn to improve efficiency. He stated, “There are two kinds of companies: those that are great at AI and everybody else.” Cuban believes Gemini enhances productivity by saving employees time, improving work quality, and assisting businesses in areas like finance and marketing where they may lack expertise. He has also participated in Google events, such as the Gemini at Work event in New York City, further underscoring his support for the company.
Alphabet Inc. (NASDAQ:GOOG) recently reported strong fourth-quarter earnings, posting earnings per share of $2.15 on revenue of $96.47 billion, surpassing analysts’ estimates of $2.13 per share. This represents a significant increase from the previous year’s Q4 earnings of $1.64 per share on $86.3 billion in revenue. CEO Sundar Pichai reaffirmed the company’s commitment to innovation, announcing plans for approximately $75 billion in capital expenditures for 2025, with a primary focus on generative AI.
As Alphabet Inc. (NASDAQ:GOOG) continues to advance its AI capabilities, it sees artificial intelligence as a transformative opportunity to solidify its market leadership. Google Cloud, a key component of Alphabet’s AI-driven strategy, posted a 30% year-over-year revenue increase in Q4 2024, reaching $11.9 billion. Alphabet’s deep expertise in AI positions it as a formidable player in cloud computing, further strengthening its competitive edge in an evolving technological landscape.
Alphabet Inc. (NASDAQ:GOOG) plays a key role in the AI arms race, offering its generative AI model, Gemini, which boasts a strong user base. Alphabet has seamlessly integrated it into Google Search, strengthening its core business. The company continues to invest heavily in AI to meet growing demand, but its stock recently experienced a selloff due to broader tech market weakness. This dip presents a potential buying opportunity, as Alphabet remains attractively valued at 19.5 times forward earnings. Given its AI-driven growth, investors may find this a strategic moment to capitalize on the company’s long-term potential.
The London Company Large Cap Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) – GOOG was a top performer this quarter reflecting strong results from its ad business, Cloud growth, and margin enhancements. Investors got some clarity on the antitrust lawsuits during the quarter, but potential outcomes from these cases remain uncertain. Margins in the core business continue to improve, and growth in the Cloud business accelerated. Management has executed its expense control plans and expanded margins through better product and process organization. GOOG has a solid balance sheet, significant market share, and generates strong returns on invested capital.”
Overall, GOOG ranks 3rd on our list of top stock picks from Mark Cuban’s portfolio. While we acknowledge the potential for GOOG as an investment, 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 GOOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.