7. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q4: 234
Appaloosa Management’s Equity Stake: $358.40 Million
While Alphabet Inc. (NASDAQ:GOOGL)’s primary revenue driver continues to be through advertising on its platforms, such as Google Search, the rapid growth of Google Cloud has positioned it as a critical contributor to Alphabet’s overall performance. In the fourth quarter of 2024, Google Cloud posted a 30% year-over-year increase in revenue, reaching $12 billion. This strong performance contributed to Alphabet’s overall fourth-quarter earnings, with total revenue climbing 12% year-over-year to $96.5 billion, and earnings per share (EPS) surging by 31% to $2.15, surpassing Wall Street expectations.
Financial projections for Alphabet remain robust; for the upcoming quarter, analysts project earnings per share of $2.04, a 7.94% increase from the same period last year, and revenue of $75.67 billion, representing an 11.94% year-over-year growth. For the full fiscal year, Alphabet Inc. (NASDAQ:GOOGL) is expected to generate $334.55 billion in revenue and $8.89 billion in earnings per share, reflecting steady, AI-driven growth coupled with ongoing infrastructure investments.
Despite these promising developments, Alphabet Inc. (NASDAQ:GOOGL) faced a setback in April 2025, when its stock fell more than 2% in early trading on April 16, following news of a major class action lawsuit filed in the United Kingdom. The approximately $6.6 billion claim, brought on behalf of British businesses, alleged that Google exploited its near-total control over the search advertising market to inflate ad prices by restricting competition. The legal action claimed that Google paid Apple to maintain its position as the default search engine on Safari and secured agreements with Android phone manufacturers to pre-install Google Search and Chrome, effectively shutting out rivals.
As a result, U.K. businesses were left with “almost no choice” but to depend on Google’s services, asserting that the company “overcharged” advertisers through anti-competitive practices. This legal challenge adds to the mounting global regulatory scrutiny that Alphabet Inc. (NASDAQ:GOOGL) faces, following similar antitrust investigations and lawsuits in both the United States and the European Union.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (parent company Alphabet) generated strong double-digit returns during the quarter, as the company’s tremendous innovation in AI, along with strength in its core business of search and advertising and a healthy focus on profit growth and shareholder friendly capital allocation, shifted investor focus away from ongoing litigation with the Department of Justice related to market dominance. In the month of December alone, Google released to the public Gemini 2.0, its most capable AI model yet, as well as new generative image and vision models. And if that was not enough, Google also announced progress in quantum computing. Once considered an AI laggard, the flurry of product announcements and AI development did not go unnoticed by the market and the stock reacted accordingly.”
