Alphabet (GOOG) Fell Along with Peers

Mairs & Power, an investment advisor, released the “Mairs & Power Balanced Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The stock market reached a record high in February. However, tariff uncertainty in March led to a fall in equities, while fixed income benefited from perceived safety. The fund ended the quarter up 0.04%. The fund outperformed the benchmark composite indexes (60% S&P 500 Total Return Index and 40% Bloomberg U.S. Government/Credit Bond Index), down 1.48%, and the Morningstar Moderate Allocation peer group, which fell 0.34%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Mairs & Power Balanced 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 2.57%, and its shares lost 3.48% of their value over the last 52 weeks. On May 6, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $165.20 per share with a market capitalization of $1.997 trillion.

Mairs & Power Balanced Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

“The Fund’s holdings in the Communications Services sector dragged on portfolio returns during the quarter due primarily to security selection. Alphabet Inc. (NASDAQ:GOOG) led underperformance as it fell in tandem with the other mega cap tech stocks. Additionally, there is increasing concern about the impact of generative AI on Alphabet’s search business and whether it will be able to meaningfully respond.”

Analyst Highlights Threats to Alphabet (GOOG) Search Business, Draws Kodak Comparison

A laptop and phone open to Google’s services in an everyday setting.

Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 174 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 160 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% or 14% in constant currency. 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 cheapest AI stock.

In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared the list of best augmented reality stocks to buy according to hedge funds. The Q1 letter from Wedgewood Partners also discussed Alphabet Inc. (NASDAQ:GOOG) and highlighted how Alphabet Inc. (NASDAQ:GOOG) is using Generative AI to improve search results, enhance monetization, and sustain growth through long-term AI investments. 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.