9. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders In Q3 2024: 202
NTM EPS Estimate: $8.61
Alphabet Inc. (NASDAQ:GOOGL) is a technology giant that is one of the largest firms in the world. The firm benefits from its wide moat in the global search engine and digital advertising industries. Alphabet Inc. (NASDAQ:GOOGL)’s search engine Google is the most widely used product worldwide, and despite being in the market for more than two decades, it has managed to stay the undisputed market leader. The billions of search queries that Alphabet Inc. (NASDAQ:GOOGL) processes also enable it to offer advertisement slots on Search and on websites to advertisers. As of H1 2024, 78% of the firm’s revenue came from Search and associated businesses. As a result, not only does Alphabet Inc. (NASDAQ:GOOGL) have to ensure that it keeps its dominant position in the industry, but the firm also has to be on the watch-out for regulatory actions against its business. It is also one of the biggest players in the cloud computing industry and has leveraged its resources to develop a foundational AI model called Gemini and custom AI chips called TPUs. Both of these could unlock additional tailwinds for Alphabet Inc. (NASDAQ:GOOGL) in the AI era.
A mega-cap firm, Alphabet Inc. (NASDAQ:GOOGL) is taking a global approach to AI. Here’s what CEO Sundar Pichai shared during the Q3 2024 earnings call:
“And third, a broad global reach through products and platforms that touch billions of people and customers around the world, creating a virtuous cycle. Let me quickly touch on each of these. We continue to invest in state-of-the-art infrastructure to support our AI efforts from the U.S. to Thailand to Uruguay. We are also making bold clean energy investments, including the world’s first corporate agreement to purchase nuclear energy from multiple small modular reactors, which will enable up to 500 megawatts of new 24/7 carbon-free power. We are also doing important work inside our data centers to drive efficiencies while making significant hardware and model improvements. For example, we shared that since we first began testing AI Overviews, we have lowered machine cost per query significantly.
In 18 months, we reduced cost by more than 90% for these queries through hardware, engineering and technical breakthroughs while doubling the size of our custom Gemini model. And of course, we use and offer our customers a range of AI accelerator options, including multiple classes of NVIDIA GPUs and our own custom-built TPUs. We are now on the sixth generation of TPUs known as Trillium and continue to drive efficiencies and better performance with them. Turning to research. Our team at Google DeepMind continues to drive our leadership. Let me take a moment to congratulate Demis Hassabis and John Jumper on winning the Nobel Prize in chemistry for their work on AlphaFold. This is an extraordinary achievement and underscores the incredible talent we have and how critical our world-leading research is to the modern AI revolution and to our future progress.”
