Alphabet (GOOG) Declined due to Investors’ Skepticism

Sands Capital, an investment management company, released its “Sands Capital Global Growth Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global Growth adopts a flexible approach to identify the most promising growth companies across the globe. Global equities fell in the first quarter, as per the MSCI ACWI. The strategy underperformed the benchmark amid the weakness. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its first-quarter 2025 investor letter, Sands Capital Global Growth Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 9.99%, and its shares lost 3.49% of their value over the last 52 weeks. On June 5, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $169.81 per share, with a market capitalization of $2.05 trillion.

Sands Capital Global Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) and Amazon declined during the quarter alongside other Magnificent Seven stocks amid a sharp rotation out of momentum-driven names. Alphabet is a global internet company that operates Google and YouTube, the two most-visited websites in the world. Shares traded lower after the company reported results as investor skepticism around Alphabet’s competitive position in AI persisted. The business’s unexpected capital expenditure guidance of $75 billion—well above the $60 billion expected by consensus—appeared to reinforce concerns that Alphabet is playing defense. Despite this, we maintain a favorable view of the company based on three factors: the scale and inertia of its user base, with seven services each serving over 2 billion users; its deep bench of technical AI talent; and a valuation that we believe remains attractive relative to long-term growth potential.”

Alphabet Inc. (GOOG)’s AI Ad Strategy Expands Reach—But Analyst Keeps Neutral Stance

A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.

Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 164 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 174 in the previous quarter. In the first quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue of $90.2 billion, representing an increase of 12% from Q1 2024. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared RiverPark Large Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.