3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 152
As a technology holding company, Alphabet Inc. (NASDAQ:GOOG) does not directly offer 5G capabilities. However, several of its subsidiaries, such as Google and X, are involved in research and development related to 5G technology. Google has partnered with various mobile carriers to offer 5G services on its Google Fi network, while X is working on developing new wireless technologies that could potentially surpass the capabilities of 5G. It is one of the best 5G stocks to invest in.
On March 20, Mark Kelley, an analyst at Stifel, initiated coverage of Alphabet Inc. (NASDAQ:GOOG) by assigning it a Buy rating and a $130 price target. The analyst observed that early demos of Microsoft’s Bing via OpenAI have been impressive, whereas Google’s demos have not been as successful. However, the analyst believes that this will not cause a significant shift in consumer behavior or affect search ad spending. Stifel estimates that the increasing focus on AI-based searches by Google may impact margins to some extent. The firm anticipates that Google will take proactive measures to address regulatory concerns before a resolution to the DOJ case is reached. Stifel also views YouTube and YouTube TV as significant opportunities for Google.
According to Insider Monkey’s fourth quarter database, 152 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 156 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with 54.5 million shares worth $4.8 billion.
Weitz Partners III Opportunity Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:
“Unfortunately, the performance story of the year is told by the Fund’s detractors. Now, weakening ad spending across all channels has added insult to injury, and concerns have spread to the other dominant digital ad player, Alphabet Inc. (NASDAQ:GOOG) — parent of Google and YouTube.
Meta, Alphabet, Amazon and CarMax were all top detractors for the quarter and calendar year periods (FIS and Liberty Broadband, respectively, complete the quarterly and calendar-year detractor lists.) To varying degrees, each is managing through cyclical challenges during a period of substantial investor pessimism. Drawdowns of this magnitude are painful, and it may be prudent for management to moderate the pace of some investments, but we remain encouraged by their long-term focus. In the short run, cutting spending indiscriminately to “defend earnings” may lessen the pain of a drawdown, but it seldom grows a company’s business value — the ultimate prize.”
