We recently published a list of the 10 Best Strong Buy Stocks To Buy Right Now. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against the other best strong buy stocks to buy right now.
Fears of a slowing economy have hit stocks recently, along with concerns that Trump’s tariffs will raise prices for consumers and lead to more inflation. These trends pose questions about whether the market broadening, which some experts have predicted, can really happen. On February 28, Sara Naison-Tarajano, Goldman Sachs Private Wealth global head of capital markets, appeared on CNBC’s ‘Closing Bell’ to discuss her growth outlook. She believed that the broadening of the market will take place, and the market is already seeing it. Considering the broadening versus the Mag 7, this year’s outperformance is pretty dramatic. If we look at what the last two years have been like combined, the returns of the Mag 7 were over 200%, while those of the rest of the market were only 31%. Therefore, the market is definitely seeing the trend materialize, and Tarajano believes it is going to continue.
She said the market is currently all about tariffs, growth, consumers, wavering, and several other factors. Among all, it is definitely about uncertainty, which in turn affects the markets and the consumers. We are seeing policy uncertainty around tariffs, geopolitical uncertainty around the Middle East and Ukraine, and some degree of regulatory uncertainty in terms of not knowing what the path will be in the future for this administration in the back half of the year. This uncertainty is coupled with the fact that we are coming off two incredible years of equity market returns. In addition, the back half of February tends to be historically weak anyway. All of these trends are coming together to create some market volatility, and it is to be expected.
READ ALSO: 11 Best Pharma Stocks to Buy According to Hedge Funds and 10 Cheap Gold Stocks to Invest In Right Now.
Could H2 Be Better in 2025?
Tarajano further said that she was and is still thinking that the first half of the year could be a bit dicey and the second half, which may see tax cuts and the impacts of deregulation, would see more deals done and more IPOs, resulting in a smoother H2. However, she said she reserved the right to revise her views based on how the policies come out. Shedding further light on the situation, she opined that the tariffs are a significant part of the base case and will be an essential part of what happens to inflation, which in turn has a broader impact on the economy. Talking about the base case, she said we will see a 4% increase in the effective tariff rate, which only has a 40 basis point impact on core PCE, a 20 basis point impact on GDP, and more. If the base case persists, we can make it through this first half.
There haven’t been many opportunities if you haven’t been long in the stock market to get involved with what the market has done over the last two years. Therefore, a bit of a clearing out is necessary, and the hope, if we can stay on track, is that the second half will be better.
From a strategic asset allocation perspective, she said that she still favors overweight US. The logic behind it is her firm’s GDP expectations, close to 2.5%, and earnings growth. There is no question that there’s been some tactical opportunity overseas, with Europe and China expected to perform better. While it is cheap, it is so for a reason, as the GDP expectations in Europe are 70 basis points. While these trends and expectations are interesting from a tactical trade perspective, it is essential to be thoughtful about international asset allocations when taking a strategic asset allocation perspective.
Our Methodology
We used Finviz and Tipranks to make a list of 35 strong buy stocks. We then selected the top 10 stocks with the highest analyst upside potential as of March 12, 2025. We also added the number of hedge fund holders for each stock as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analyst upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOG)
Analyst Upside: 32.02%
Number of Hedge Fund Holders: 174
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube. Alphabet Inc. (NASDAQ:GOOG) has sound operations. Fiscal Q4 2024 showed a 12% growth in overall revenue and a 12.5% growth in search revenue. YouTube grew by 13.8%, while revenue from Google Cloud rose by around 30% to $12 billion.
The company announced it would invest $75 billion in capex this year, up from $53 billion in 2024. Its stock has risen nearly 150% over the last five years, including around 45% growth since OpenAI released GPT-4o in May 2023. Investors expect Alphabet Inc.’s (NASDAQ:GOOG) stock to continue on a positive growth trajectory due to its investments in AI. Google Cloud is another significant growth driver for the company. Even though it makes only 12% of company revenue, it rose 31% yearly, bringing a positive light to its operations.
Merion Road Capital Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG): We have held GOOG for a long time (since 2018) on the basis of its immense business quality paired with an undemanding valuation, improving treatment of minority shareholders, and multiple options for value creation. Recently we have seen Alphabet bashed for losing the AI race to now heralded for its progress. I remain excited about their prospects with several near-term, mid-term, and long-term tailwinds. Near-term, Google Cloud continues its rapid growth and their latest large language model, Gemini 2.0, appears to have made significant progress to better serve consumer needs and improve GOOG’s other product offerings. Mid-term, Waymo is on the cusp of becoming a real value driver for the company; there are abundant articles discussing Waymo stealing share from the ride-share economy and launching in new geographies. Long-term, GOOG’s recently announced quantum computing chip positions it well for a future (many, many years away) where computing process are fundamentally different than today. All of these options are embedded in a company that already has an established and dominant earnings stream.”
Overall, GOOG ranks 7th on our list of the best strong buy stocks to buy right now. While we acknowledge the potential of 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 time frame. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
