5 Best Artificial Intelligence Stocks To Buy Now

3. Alphabet Inc. (NASDAQ:GOOGL)

Number  of Hedge Fund Holders (Q1): 205

Alphabet Inc. (NASDAQ:GOOGL) is the parent company of Google and is one of the largest companies by revenue. The company has embedded itself deeply in AI technology including testing self-driving cars through its subsidiary, Waymo. In addition, the company’s subsidiary DeepMind develops general-purpose AI technology.

Alphabet Inc. (NASDAQ:GOOGL) has one of the strongest balance sheets among the Big Five of IT. It is the only one of the Tech Giants whose cash and short-term investments outweigh all of its liabilities. The company generated $19.5 billion in cash from operating activities in the second quarter of 2022. Moreover, as of Q2, the company’s total cash and cash equivalents, including marketable securities, were $125 billion. In 2012, the company’s cash from operating activities was around $16.7 billion and was over $90 billion by 2021. In the trailing 12-month period the cash from operating activities has reached a staggering $95 billion.

On August 3, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Alphabet Inc. (NASDAQ:GOOGL)’s shares and boosted the price target to $186 from $183. According to the analyst, the company’s Q2 reports show the resilience of its core business in cloud and research. Feinseth further added that the company’s current investments in AI are guiding towards “increasingly focused and helpful experiences for users and businesses”.

Here is what Wedgewood Partners has to say about Alphabet Inc. (NASDAQ:GOOGL) in its Q2 2022 investor letter:

“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”