Alphabet (GOOG) Surged on Improved Demand for AI Services

Pelican Bay Capital Management, an investment management company, released its third-quarter 2025 investor letter. A copy of the same can be downloaded here. PBCM Concentrated Value Strategy returned 7.8% in the quarter, compared to a 5.3% return for the Russell 1000 Value Index. YTD, the fund returned 11.2% compared to 11.6% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, PBCM Concentrated Value Strategy 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 20.15%, and its shares gained 58.65% of their value over the last 52 weeks. On November 6, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $285.34 per share, with a market capitalization of $3.439 trillion.

PBCM Concentrated Value Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) gained 41% this quarter as they also benefited from increasing demand for their AI services. GOOG’s Gemini AI app has recently surpassed OpenAI’s ChatGPT app in the Apple app store, and the company’s Tensor Processing Chips have become a viable alternative to Nvidia’s GPUs in Data Center’s dedicated to AI use. I would note that GOOG’s stock price has increased to the top end of our estimated intrinsic valuation range, and we have trimmed our position meaningfully.”

Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 178 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 164 in the previous quarter. In the third quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved its first-ever $100 billion in 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 the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 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.