Strong Dollar is Crushing These 5 Stocks

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 160

Alphabet Inc. (NASDAQ:GOOG) missed Wall Street estimates on Q2 2022 earnings, and the company warned investors in its latest earnings call on July 26 about the difficult macro backdrop, consisting of increasing currency challenges from the strong dollar and ad spending slowdown in the future. A strong dollar marked a 3.7% negative impact in Q2, with a higher effect on operating income than revenues. Alphabet Inc. (NASDAQ:GOOG) expects an even greater foreign exchange impact from the strengthened dollar ahead. 

Susquehanna analyst Shyam Patil on July 27 lowered the price target on Alphabet Inc. (NASDAQ:GOOG) to $150 from $187 and reiterated a Positive rating on the shares. The analyst said Q2 results were better than feared, though management did point towards difficult 2H comps, macro uncertainty, and forex headwinds. The analyst said while Alphabet Inc. (NASDAQ:GOOG) will not be immune from macro turbulence, he continues to see Search as one of the most resilient categories of online spend and believes it will offer strong support for the overall business.

Among the hedge funds tracked by Insider Monkey, Chris Hohn’s TCI Fund Management is a significant stakeholder of Alphabet Inc. (NASDAQ:GOOG), with 2.37 million shares worth $6.62 billion. Overall, 160 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG) at the end of Q1 2022, up from 158 funds a quarter ago. 

Here is what Wedgewood Partners has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:

“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”