5 Cash-Rich Tech Stocks to Buy Now

2. Alphabet Inc. (NASDAQ:GOOGL)

Free Cash Flow: $65.18 Billion

Number of Hedge Fund Holders: 191

Alphabet Inc. (NASDAQ:GOOGL) joins Microsoft Corporation (NASDAQ:MSFT) as one of the world’s largest cloud services providers. With accelerating cloud adoption, Alphabet Inc. (NASDAQ:GOOGL) will be able to generate robust free cash flows in the foreseeable future. As of September 7, Alphabet Inc. (NASDAQ:GOOGL) has free cash flows of $65.18 billion and is one of the top cash-rich stocks to buy now.

Wall Street sees material upside to Alphabet Inc. (NASDAQ:GOOG). On August 3, Tigress Financial analyst Ivan Feinseth raised his price target on Alphabet Inc. (NASDAQ:GOOG) to $186 from $183 and reiterated a Strong Buy rating on the shares. Feinseth is bullish on the company’s Cloud and Search business segments and its expansion and position in the artificial intelligence vertical.

At the end of the second quarter of 2022, 191 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOGL) and held stakes worth $22 billion. Of those, TCI Fund Management was the most prominent investor in the company, with stakes worth $5.4 billion.

Arch Capital named several companies, one of which was Alphabet Inc. (NASDAQ:GOOG), in its second-quarter 2022 investor letter. Here is what the firm had to say:

“In May we decided to buy Alphabet Inc. (NASDAQ:GOOG) (parent company of Google, YouTube, and Android). Our thesis was simple. Alphabet has billions of locked-in users around the globe with businesses like Search, Maps, and YouTube that should grow in-line or faster than worldwide GDP. With all the cash these businesses generate, management is able to reinvest in Google Cloud, Other Bets projects like Waymo, and return cash to shareholders via share repurchases. At an enterprise value-to-free cash flow (EV/FCF) of around 20 at the time of our purchase, we believe this sets up shareholders for low risk 15%+ returns over the next five years.”