Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for the “Madison Large Cap Fund”. A copy of the letter can be downloaded here. In the fourth quarter, the S&P 500 returned 2.65%, resulting in a full-year return of 17.9% for 2025. Over the last three years, the Index has achieved annual growth of over 21%. Following the recent trends, market leadership was defined by High Beta and Momentum factors, with narrow participation. However, in the fourth quarter, the market saw slight improvements in previously lagging sectors like Healthcare, Financials, and Consumer Discretionary. Still, mega-cap technology companies remained the primary drivers of the S&P 500’s overall return, indicating high stock concentration. Against this backdrop, the Madison Large Cap Fund (Class I) appreciated 3.43% compared to the S&P 500 Index’s 2.65% return. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Madison Large Cap Fund highlighted stocks like Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence, and is a significant contributor to the fund’s performance in the quarter. On February 23, 2026, Alphabet Inc. (NASDAQ:GOOG) stock closed at $311.69 per share with a market capitalization of $3.771 trillion. One-month return of Alphabet Inc. (NASDAQ:GOOG) was -6.96%, and its shares gained 75.73% of their value over the last 52 weeks.
Madison Large Cap Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2025 investor letter:
“The top five contributors for the quarter were Alphabet Inc. (NASDAQ:GOOG), Parker-Hannifin, Keysight Technologies, Danaher, and PACCAR. Shares in Alphabet continued to appreciate in the fourth quarter as its main businesses across Search, YouTube, and Cloud continued to accelerate. Furthermore, Alphabet released new AI models that gave investors further confidence that the company is well positioned for growth.”
Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 198 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 186 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ: GOOG) achieved its first-ever $400 billion annual revenue. While we acknowledge the risk and potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Alphabet Inc. (NASDAQ:GOOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared a list of Goldman Sachs’s top growth stock picks. In addition, please check out our hedge fund investor letters Q4 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.
