Jim Cramer’s 5 Best of Breed Stocks

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 204

Last year, Jim Cramer mentioned Alphabet Inc. (NASDAQ:GOOG) among some other tech names and called these companies best of breed. The analyst said that companies like Alphabet Inc. (NASDAQ:GOOG) tend to bottom before any other company during a market rotation towards tech. Cramer also wondered why Alphabet Inc. (NASDAQ:GOOG) shares, along with other companies, were tanking despite the firms’ posting strong earnings.

Cramer was right. Over the past one year Alphabet Inc. (NASDAQ:GOOG) shares have gained about 40%. Analysts and investors are excited about the company’s AI prospects.

Insider Monkey’s database of 910 hedge funds shows that 204 hedge funds had stakes in Alphabet Inc. (NASDAQ:GOOG) as of the end of the second quarter.

Wedgewood Partners made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) was a top contributor to performance as search revenues accelerated during their second quarter. This improved performance flies in the face of fears that demand for the Company’s advertising inventory and core search functionality would be diluted by the Company’s own generative-AI offerings and outside substitutes. Alphabet subsidiaries have been at the vanguard of artificial intelligence for more than a decade. The Company has spent almost $150 billion on research and development over just the past five years, and today over 80% of the Company’s advertising customers use an AI-enabled tool when they run their Google Search and YouTube campaigns. Thus, Alphabet is certainly not “behind the curve” in any way, shape, or form when it comes to AI. Quite the contrary, the Company has ample room to rationalize spending to drive better returns on investments and increase capital returns to shareholders at these relatively attractive forward earnings multiples.”