Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The U.S. equity market started the year with a modest decline, with the S&P 500 Index declining 4.27% during the quarter. Conversely, the Bloomberg U.S. Aggregate Bond Index rose 2.78% during the same period. The composite returned 0.78% gross of fees (0.73% net of fees) in the first quarter underperforming the 2.14% return of the Russell 1000 Value Index and outperforming -4.27% return of the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first quarter 2025 investor letter, Aristotle Value Equity Strategy emphasized stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was -0.74%, and its shares gained 3.51% of their value over the last 52 weeks. On April 14, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $161.47 per share with a market capitalization of $1.952 trillion.
Aristotle Value Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:
“Headquartered in Mountain View, California and founded by Larry Page and Sergey Brin, Alphabet Inc. (NASDAQ:GOOG) is one of the world’s most dominant and innovative technology companies. Best known as the parent company of Google, Alphabet generates most of its revenue from digital advertising, particularly search. Google currently holds an estimated 87% market share in U.S. search and nearly 90% globally, underpinning a highly profitable ad business that accounts for roughly 75% of Alphabet’s total revenue.
While Google was founded in 1998 and became public in 2004, Alphabet was created in 2015 to provide greater transparency and operational independence across its varied business lines. Beyond its core, the company has increasingly diversified into accelerating products, including Google Cloud and YouTube’s suite of subscription services (YouTube Premium, YouTube TV and YouTube Music). Today, Google Services (Search, YouTube, Chrome, Android and the Play Store) makes up ~87% of total revenue, while Google Cloud represents ~13%. Alphabet also invests in longer-term innovation through its Other Bets segment, which includes autonomous driving (Waymo), life sciences (Verily) and advanced AI research (DeepMind)…” (Click here to read the full text)
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 174 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 160 in the previous quarter. In 2024, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue growth of 14% compared to 2023, reaching $350 billion. For the fourth quarter, the revenue was $96.5 billion, reflecting a 12% increase in both reported and constant currency. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered Alphabet Inc. (NASDAQ:GOOG) in another article, where we shared top stock picks from Goldman Sachs value stocks. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.