Top 10 Stocks to Buy According to Eagle Capital Management

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders as of Q4: 234

Eagle Capital Management’s Equity Stake: $1.54 Billion 

Alphabet Inc. (NASDAQ:GOOGL) posted strong fourth-quarter earnings, reporting $2.15 per share on revenue of $96.47 billion, slightly exceeding analyst expectations of $2.13 per share. This marked a significant improvement from the previous year’s Q4 earnings of $1.64 per share on $86.3 billion in revenue. CFO Anat Ashkenazi noted that a substantial portion of Alphabet’s investments has gone into technical infrastructure, primarily servers and data centers. CEO Sundar Pichai reaffirmed the company’s commitment to innovation, announcing plans for approximately $75 billion in capital expenditures for 2025, with a continued focus on generative AI.

In the race for artificial intelligence dominance, Alphabet Inc. (NASDAQ:GOOGL) stands out, viewing AI as a “once-in-a-generation opportunity” to strengthen its position in key markets, particularly cloud computing. Google Cloud saw its revenue surge 30% in Q4 2024 to $11.9 billion, highlighting its growth potential. Despite recent stock fluctuations, dropping below $170 per share, investor optimism remains high, with a median price target of $220, suggesting a projected 30% increase by year-end. Alphabet’s deep institutional expertise in AI could further propel its cloud business, positioning it as a formidable competitor in the evolving tech landscape.

Beyond financial performance, Alphabet Inc. (NASDAQ:GOOGL) faces increasing competition in AI and search, areas where it has traditionally been dominant. While Google Search remains the industry leader, AI-powered chatbots, such as OpenAI’s ChatGPT and Meta AI, have challenged its position. DeepSeek’s AI model also directly competes with Google’s Gemini, which saw an upgrade in December with the release of Gemini 2.0 Flash, offering faster response times. Addressing competition, Pichai acknowledged DeepSeek’s capabilities but emphasized that Google’s AI models remain among the most efficient in the industry, standing strong against rivals like DeepSeek’s V3 and R1. As Alphabet Inc. (NASDAQ:GOOGL) continues investing heavily in AI, its ability to maintain leadership in search and cloud computing will be crucial for sustaining long-term growth.