We recently published a list of Top 10 Stocks to Buy According to Adage Capital Management. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other top stocks to buy according to Adage Capital Management.
Adage Capital Management, based in Boston, is a major investment firm specializing in managing the broader market’s assets, with a strong focus on Endowments and Foundations. Among its prominent clients are institutions such as Harvard University, Dartmouth College, Northwestern University, the American Red Cross, and the Getty Foundation. Over the last 15 years, Adage and its predecessor, the Select Equity Group at Harvard Management Company, have consistently surpassed the wider market’s performance by an average of 3.5%.
The firm’s origins date back to the mid-1980s when co-founders Phillip Gross and Robert Atchinson met as investment analysts for Harvard’s endowment. In the 1990s, following controversy over large performance bonuses at Harvard Management, they, along with an 18-person team, left to establish Adage Capital Management. Their launch was backed by a $1.8 billion initial investment from Harvard, with an agreement that the university would receive 10% of Adage’s earnings.
Adage Capital Management primarily manages the broader market’s assets for endowments and foundations, utilizing a long/short equity strategy driven by fundamental analysis. The firm also explores risk arbitrage and event-driven investment opportunities when suitable.
Phillip Gross, more commonly known as Phill Gross, co-founded Adage Capital Management, L.P. in 2001 and serves as a Managing Director and Healthcare Portfolio Manager. Before establishing the firm, he spent 18 years at Harvard Management Company, Inc., where he held roles as a Healthcare and Retail Analyst, Equity Research Director, and Partner.
Gross earned both his B.S. in finance and economics in 1982 and M.S. in investments in 1983 from the University of Wisconsin. He previously served on the UW Foundation Board of Directors and is currently involved with the Steve Hawk Center for Applied Securities Analysis Advisory Board and the Nicholas Center for Applied Corporate Finance Advisory Board. In 2006, he was honored with the Distinguished Alumnus Award from the UW Business School.
In philanthropy, Gross co-founded Strategic Grant Partners, an initiative aimed at systemic change in education and family services in Massachusetts. He serves as Vice President of the Board of Directors for Youth Enrichment Services, a Boston-based organization that introduces urban youth to outdoor activities. Additionally, he is a Board Trustee of the U.S. Ski and Snowboard Association, vice-chair of its Investment Committee, and a board member of the T2 Foundation.
Adage Capital Management’s Q4 2024 13F filing reported $57.19 billion in managed 13F securities, with its top 10 holdings accounting for 31.7% of the total portfolio. This distribution highlights the firm’s diversified investment approach.
Our Methodology
The stocks discussed below were picked from Adage Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 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).
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Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q4: 234
Adage Capital Management’s Equity Stake: $1.03 Billion
Alphabet Inc. (NASDAQ:GOOGL) reported robust fourth-quarter earnings, surpassing analyst expectations. The company posted earnings of $2.15 per share on revenue of $96.47 billion, against projections of $2.13 per share. This performance represented a notable increase from the previous year’s Q4 results, which stood at $1.64 per share on revenue of $86.3 billion. CFO Anat Ashkenazi highlighted that a significant portion of the company’s investments has been directed toward technical infrastructure, particularly in expanding its server and data center capabilities. CEO Sundar Pichai reinforced Alphabet’s commitment to innovation, announcing plans for approximately $75 billion in capital expenditures for 2025, with a strong emphasis on advancing generative AI. The company views artificial intelligence as a transformative opportunity to solidify its market presence, especially in cloud computing.
On March 12, 2025, Alphabet Inc. (NASDAQ:GOOGL)’s stock closed at $169.06, reflecting a 1.86% increase from the previous trading session. This gain outpaced the broader market’s daily rise of 0.49%, while the Nasdaq climbed 1.22%. Over the past month, Alphabet’s shares dropped 11.27%, performing slightly better than the Computer and Technology sector, which saw a 12.07% decline, but trailing the market’s 8.15% loss.
Investors are closely monitoring Alphabet Inc. (NASDAQ:GOOGL)’s financial performance ahead of its next earnings report. Projections estimate earnings per share at $2.04 for the quarter, marking a 7.94% rise compared to the same quarter in the prior year. Revenue for the quarter is expected to reach $75.67 billion, representing an 11.94% year-over-year increase. For the full fiscal year, consensus forecasts suggest Alphabet Inc. (NASDAQ:GOOGL) will achieve earnings of $8.89 per share, reflecting a 10.57% annual growth. Additionally, revenue is expected to reach $334.55 billion, an increase of 13.36% compared to the prior year. These estimates highlight the company’s continued financial momentum and its strategic investments in AI and technical infrastructure as key drivers of future growth.
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.”
Overall, GOOGL ranks 8th on our list of top stocks to buy according to Adage Capital Management. While we acknowledge the potential for 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. 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.