We recently published a list of Kevin O’Leary’s Stock Portfolio: 15 Stock Picks for 2025. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other Kevin O’Leary’s stock picks for 2025.
elevision personality, financier, and entrepreneur, Kevin O’Leary, also known as ‘Mr. Wonderful’ is recognized mostly as one of the panelists on the reality shows Shark Tank and Dragon’s Den. In 1986, the Irish-Canadian began his business career by launching the educational software company Softkey with $10,000 from his mother’s investment and leveraging the proceeds from the sale of his SET share.
When it comes to stock investing, Mr. Wonderful seeks names that meet three criteria: They must be quality companies that boast consistently strong financial performance and a solid balance sheet. Second, he believes that a stock portfolio must be diverse across multiple market sectors. Most importantly, however, he demands income, stressing that the companies he invests in should be ones that pay dividends to shareholders. The ALPS O’Shares U.S. Quality Dividend ETF, an ETF offered by O’Shares Investment Advisors, aims to encompass O’Leary’s strategies by holding stocks that combine all three of these characteristics. Since its launch, the ETF has returned 115.18% to shareholders. While high-risk, high-reward investments like those on Shark Tank or volatile assets like Bitcoin can be thrilling, O’Leary believes that a focus on consistent, dependable income should be the basis of a sound portfolio. The venture capitalist summed up this view in a LinkedIn post:
“OUSA is part of the S&P 500, cherry-picking the highest quality balance sheets with positive cash flow from around 100 out of the 500 names. Then there’s OUSM, which grabs the Russell 2000 and weeds out the underperformers – those companies not making any real dough. Forget Shark Tank, forget Bitcoin. Sure, I’ve got a 5% stake in Bitcoin and another 5% in gold, but the meat of my US portfolio? It’s in OUSA or OUSM.”
The Race for TikTok
Former president Joe Biden recently signed a bipartisan bill that deemed TikTok a national security threat and required Bytedance, the platform’s Chinese parent company, to either sell or divest from the platform completely in order for the social media platform to remain available in the United States. During a recent appearance on Fox News’ “America’s Newsroom”, Kevin O’Leary claimed to have made an offer of $20 billion in cash to TikTok’s owners to purchase the platform, saying “Right now, $20 billion is on the table, cash, cash, $20 billion.” However, he added that the federal government wasn’t able to verify whether the data of American account holders was actually being shared with Chinese leaders. That said, he believes the risk wasn’t worth it. Moreover, in light of the dwindling timeframe, he said that companies are weighing the risks of maintaining the app’s availability in the U.S., while keeping in mind the potential penalties for any provider who permits access beyond the cutoff date.
“As of midnight on the 19, any service provider … that could be an Apple, that could be an Oracle, it could be a video compression technology company that’s being paid as a consulting service, any of them that keep this thing alive is subject to $5,000 a day fine times 170 million. That’s over a billion dollars a day.”
Our Methodology
O’Leary typically favors equities of well-established, financially stable companies with strong balance sheets and a history of consistent dividend growth. The following holdings are the top 15 from the ALPS O’Shares U.S. Quality Dividend ETF (BATS:OUSA). For these stocks, we have also provided the hedge fund sentiment, as of Q3 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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Photo by Firmbee.com on Unsplash
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) is renowned in the technology industry for being a global giant due to its diverse products, including Google Cloud and Google Services, which dominate a number of market segments. Google’s main products—Search, YouTube, Android, Chrome, and advertising services—lead their respective markets, thanks to cutting-edge advances in artificial intelligence.
Alphabet Inc. (NASDAQ:GOOG) and Taiwan’s HTC recently agreed to invest $250 million to strengthen their position in XR (extended reality) technology. The agreement follows Google’s December release of the Android XR platform, which was created in collaboration with Qualcomm and Samsung Electronics. The purchase aligns with Google’s development of the Android XR platform for smart glasses and headsets.
Stifel analyst Mark Kelley increased his price target for GOOGL stock from $200 to $225 while keeping the shares at a buy rating. Alphabet Inc. (NASDAQ:GOOG) is still the “dominant leader in search and ad-supported online video,” says Kelley, who also noted that the company has a “long-term growth opportunity” in both AI and digital advertising. Additionally, Stifel appreciates that the company offers a variety of business tools, such as AI-powered advertising solutions, in addition to Google Gemini, the company’s flagship AI assistant.
Qualivian Investment Partners stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL): Q2 2024 revenues and EPS beat expectations, with total revenues growing 14%, Search ad revenues growing 14%, YouTube ads growing 13%, and Google Cloud revenues growing 29%. Revenue growth in the quarter constituted a continued sequential improvement from earlier quarters in the year, suggesting a continued rebound in Alphabet’s core business except for YouTube ad revenues, which missed expectations and showed deceleration in the growth rate as compared to Q1 when it grew 21%. Operating margins improved by 310 bps vs. the same quarter last year.
Management continued to highlight developments with their generative AI program, which is seen as a foundational platform with opportunities across their businesses but particularly in search and cloud. However, this comes with material capex investment well ahead of the expected economic benefits from Gen AI, and the level of spending is leading investors to worry about the ROI on that spend for Alphabet, as well as the other hyperscalers (Microsoft and Amazon). We continue to have confidence in Alphabet’s ability to generate strong revenue, earnings, and cash flow growth well above the S&P 500’s in the years to come and view it as a core holding for the long term.”
Overall, GOOGL ranks 5th on our list of Kevin O’Leary’s stock picks for 2025. While we acknowledge the potential of GOOGL, our conviction lies in the belief that certain 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 GOOGL 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.
