10 Best Machine Learning Stocks to Buy Now

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL) is a tech company that is currently leading in AI research and uses machine learning across its search engine, cloud services, and other offerings. It operates through three segments under the name of Google Services, Google Cloud, and Other Bets segments. The Google Cloud segment offers AI infrastructure, Vertex AI platform, cybersecurity, data and analytics, and other related services.

Roth MKM recently reiterated a Buy rating on the company with a $220 price target on March 19. This sentiment was fueled by the company’s $32 billion Wiz acquisition. This is the largest acquisition in the company’s history. With this, Alphabet Inc. (NASDAQ:GOOGL) can offer improved cloud security and threat detection data across cloud environments. The company is also positioned for long-term AI growth due to its significant infrastructure. This includes data centers, GPUs, and TPUs.

The company’s advanced AI-powered features like AI Overviews in Search are monetized at the same rate as traditional search. For AI and cloud growth, the company is planning a $75 billion CapEx investment in 2025. This will particularly be focused on data centers and servers. Notably, the company’s Cloud business alone grew by 30% year-over-year in Q4 2024. The combined annual revenue from Cloud and Youtube exceeded $110 billion.

Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”