We recently compiled a list of the 12 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other AI stocks on Wall Street’s radar.
Almost 50 House Democrats have signed a message to stop the unauthorized use of AI tools in the government. Members of Congress have asked to cease applying any unauthorized artificial intelligence system that will aid in curbing government spending. President Donald Trump has set up DOGE, or the Department of Government Efficiency. Meanwhile, billionaire Elon Musk has been assigned the responsibility to cut what DOGE will say is waste, fraud, and abuse in the federal bureaucracy.
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The Democrats have acknowledged that artificial intelligence holds the potential to modernize the US government. However, it also highlighted the potential concerns related to employee monitoring and access to sensitive data by DOGE and its AI tools.
“These present serious security risks, self-dealing, and potential criminal liability if not handled correctly, and have the potential to undermine successful and appropriate AI adoption,”
-Letter, spearheaded by Representatives Donald Beyer, Mike Levin and Melanie Stansbury.
The Democrats have further demanded that the administration terminate the use of any AI systems that haven’t been formally approved through processes such as FedRAMP or that have been unable to meet existing legal requirements. The letter, addressed to the White House Office of Management and Budget, was also questioned on whether any of the technology used by the administration was powered by Musk’s company, xAI. This question, in particular, has been asked to clarify any potential conflicts of interest.
According to the Democrats, these would be “exponentially worse if Musk pursues further contracts to become a major provider of government AI services.”
The White House has recently introduced new policies on federal agency AI use and the federal government.
“President Trump recognizes that AI is a technology that will define the future. This administration is focused on encouraging and promoting American AI innovation and global leadership, which starts with utilizing these emerging technologies within the Federal Government. Today’s revised memos offer much needed guidance on AI adoption and procurement that will remove unnecessary bureaucratic restrictions, allow agencies to be more efficient and cost-effective, and support a competitive American AI marketplace.”
– Lynne Parker, Principal Deputy Director of the White House OSTP.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 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 user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On April 16, Needham analyst Laura Martin maintained a “Buy” rating on the stock and reduced the price target to $178.00. The firm’s buy rating stems from Alphabet’s strategic positioning in the digital landscape, particularly its “Zero Click” strategy that is anticipated to be a major disruptor due to its integration with generative AI.
User behavior and content creation are both likely to be impacted by this strategy, resulting in new business models and frameworks. Alphabet also holds the potential to expand its margins through generative AI, albeit with some challenges. All in all, the buy rating is justified amid near-term valuation risks and potential upside drivers stemming from Generative AI.
Overall GOOGL ranks 4th on our list of the AI stocks on Wall Street’s radar. While we acknowledge the potential of GOOGL 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
