11 Most Undervalued High Quality Stocks to Buy According to Hedge Funds

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1. Alphabet Inc. (NASDAQ:GOOGL)

Forward P/E Ratio: 18.75

Number of Hedge Fund Holders: 227

Alphabet Inc. (NASDAQ:GOOGL) is one of the Most Undervalued High Quality Stocks to Buy According to Hedge Funds. On July 11, Reuters reported that Alphabet Inc. (NASDAQ:GOOGL) has agreed to pay about $2.4 billion for a deal to license the technology of Windsurf, a startup specializing in AI coding tools.

This is seen as a major move by the company to enhance its artificial intelligence capabilities, specifically in AI-assisted coding. The deal follows the breakdown of a prior potential acquisition of Windsurf by OpenAI, which had offered $3 billion but ultimately did not close.

As part of the deal, Alphabet Inc. (NASDAQ:GOOGL) has hired Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and selected R&D team members to join Google’s DeepMind division. This team will focus on agentic coding projects, primarily working on Google’s Gemini AI initiative.

Alphabet Inc. (NASDAQ:GOOGL) is a holding company that owns Google and operates through three main segments, including Google Services, Google Cloud, and Other Bets.

While we acknowledge the potential of GOOGL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.

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