Cantor Fitzgerald’s Top Internet Stocks: Best Stocks To Buy According To $13.2 Billion Firm

8. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders In Q2 2024: 165

Share Price Target Upside: 22%

Cantor’s Rating: Neutral

Cantor’s Share Price Target: $190

Alphabet Inc. (NASDAQ:GOOG) is one of the leading technology companies in the world, and it owes its success to the Google Search search engine. This has allowed it to have a fortress balance sheet, as evidenced by $111 billion of cash and equivalents, through Alphabet Inc. (NASDAQ:GOOG)’s dominance in the advertising market through which it serves as an intermediary between publishers and advertisers and also offers ad spots on its search engine. Alphabet Inc. (NASDAQ:GOOG)’s resources and tech focused nature have also made it into a key AI player and one of the few companies with a foundational AI model in the form of Gemini. Gemini allows Alphabet Inc. (NASDAQ:GOOG) to build AI products and services, and it also enables the company to offer AI products to others. Additionally, Alphabet Inc. (NASDAQ:GOOG)’s tensor processing units (TPUs) are among the leading AI chips in the industry; so much so that they’ve enticed Apple to use them for Apple Intelligence. However, headwinds in the form of regulatory action against Search persist and could knock the wind out of the firm in the not so distant future.

Patient Capital Management mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter. Here is what the fund said:

“Alphabet Inc. (GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”