We recently published a list of 10 Best Stocks to Buy for High Returns in 2025. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other best stocks to buy for high returns in 2025.
Market Outlook 2025
On December 17, 2024, J.P. Morgan released its market outlook 2025. The report expects the global economy to continue growing at a robust rate, however a sharp slowdown in China is expected. Regarding the equity market, the firm anticipates depressing trends across stocks, sectors, and themes. Analysts at the firm estimate the S&P 500 to be around 6,500 in 2025 with earnings per share of $270. The head of Global Market Research, Hussain Malik noted that the policies of the United States regarding trade, immigration, and regulatory policy will play a critical role in defining the year’s outcome for the country and globally.
The report further elaborated on its anticipation of a depressed stock market by highlighting de-coupling central bank policies, uneven progress in disinflation, and ongoing technological innovation. Moreover, increased geopolitical tensions are also likely to add unusual complexity to the global stock market. Despite all this, the firm has bright expectations for the United States. It believes that the country will remain a key driver of growth due to factors such as an expanding business cycle, a robust labor market, increased capital spending related to AI, and active capital markets. On the other hand, Europe is expected to grapple with structural challenges, while emerging markets may face headwinds from persistent high interest rates, a strong US dollar, and trade policy issues.
Lakos-Bujas, head of Global Markets Strategy at J.P. Morgan warned that a key risk to their base case involves disinflation stalling or reversing, which could prompt the Federal Reserve to consider interest rate hikes later in 2025 or early 2026. Such developments would necessitate a reassessment of their market outlook.
Our Methodology
To curate the list of the 10 best stocks to buy for high returns in 2025, we used Insider Monkey’s third-quarter hedge funds database. We checked the 25 most widely held stocks by hedge funds for 10-year growth rates from Seeking Alpha and ranked these stocks in ascending order of the number of hedge funds.
Why do we care about what hedge funds do? 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).
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
10-Year Revenue Growth: 18.24%
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) is a diverse technology holding company that primarily oversees Google and its various subsidiaries. While most investors know the company due to its popular search engine, it is also a leading player in AI. The company has launched its Gemini AI chatbot and also recently debuted its Gemini 2.0, which will enable AI to do more complex tasks.
On January 24, Scotiabank raised its price target for Alphabet Inc. (NASDAQ:GOOGL) from $212 to $240, while keeping its Outperform rating on the stock. The firm believes in consistent demand for its products and services throughout 2025. The company during its fiscal third quarter of 2024, demonstrated robust business expansion. It grew its revenue by 15% year-over-year to reach $88.3 billion, with a net income of $26.3 billion indicating high profitability. It is one of the best stocks to buy for high returns in 2025.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
Overall, GOOGL ranks 3rd on our list of best stocks to buy for high returns in 2025. While we acknowledge the potential of GOOGL to grow, our conviction lies in the belief that 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
