4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 234
Market Cap as of March 27: $2.024 trillion
Enterprise Value as of March 27: $1.95 trillion
Alphabet Inc. (NASDAQ:GOOG) operates through three distinct segments: Google Services, Google Cloud, and Other Bets. The Google Services division manages an extensive range of products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube. The primary economic driver of the company is its advertising business, which displays relevant ads alongside search results on its Google search engine. Digital advertising has proven to be an incredibly profitable venture for the company, as its Google search page remains one of the most valuable online assets.
The Google Search platform contributed $175.0 billion, or 73.6%, to Alphabet Inc. (NASDAQ:GOOG)’s total ad revenue of $237.9 billion in 2023. The Google Services branch generated $84 billion in revenue for the fourth quarter of 2024, reflecting a 10% increase from the previous year, primarily due to an 11% rise in advertising revenues. The platform saw a 14% increase in advertising revenue driven by heightened U.S. election-related ad spending. Since the previous elections in 2020, total spending by both parties has risen substantially.
Alphabet Inc. (NASDAQ:GOOG) remains a dominant force in digital advertising and technology, frequently recognized among the best halal stocks for its continued innovation. The company rapidly integrates AI advancements into user interactions while expanding its profitable search revenue base. Its new user-oriented features, such as Circle to Search with voice and camera functions, enhance creative search methods, generating more commercial opportunities for advertisers. As part of its expansion strategy, the corporation announced plans to increase capital expenditures from $53 billion to $75 billion in the current year. The business maintains positive stock market forecasts as it implements artificial intelligence solutions across 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) based on 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 processes are fundamentally different from today. All of these options are embedded in a company that already has an established and dominant earnings stream.”
