5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders as of Q4: 174
Two Sigma Investments’ Equity Stake: $747.02 Million
Alphabet Inc. (NASDAQ:GOOG) delivered a strong fourth-quarter performance, surpassing market expectations with earnings of $2.15 per share on revenue of $96.47 billion. This outperformed analyst projections of $2.13 per share and showed significant growth from the prior year’s fourth quarter, where earnings were $1.64 per share on revenue of $86.3 billion. CEO Sundar Pichai reaffirmed Alphabet’s commitment to innovation, outlining plans to invest approximately $75 billion in capital expenditures for 2025, with a primary focus on advancing generative AI. The company views AI as a critical growth driver, particularly in the cloud computing sector, reinforcing its efforts to maintain a competitive edge. For Alphabet Inc. (NASDAQ:GOOG)’s upcoming earnings report, analysts project earnings per share of $2.04 for the quarter, a 7.94% increase year-over-year, with revenue expected to rise 11.94% to $75.67 billion. For the full fiscal year, Alphabet’s earnings are forecasted to grow 10.57% to $8.89 per share, while revenue is estimated to reach $334.55 billion, reflecting a 13.36% increase from the prior year.
To further strengthen its position in cloud computing and cybersecurity, Google LLC has signed a definitive agreement to acquire Wiz, Inc., a leading cloud security platform, for $32 billion in an all-cash transaction. Once finalized, Wiz will become part of Google Cloud, marking a significant step in enhancing cybersecurity capabilities and expanding multi-cloud adoption. With the rapid evolution of AI and cloud services, security concerns have become a top priority for businesses and governments worldwide. Wiz’s cloud-native security solutions integrate seamlessly with major platforms like Amazon Web Services, Microsoft Azure, and Oracle Cloud, providing organizations with a comprehensive defense against emerging cyber threats.
This acquisition solidifies Alphabet Inc. (NASDAQ:GOOG)’s position as a dominant force in cloud computing, further differentiating Google Cloud from its competitors. With its robust earnings growth, aggressive AI expansion, and now a strengthened cloud security business, GOOG remains a top stock to buy, offering significant potential for long-term investors.
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.”
