Analysts Are Talking About These 10 Stocks as AI Investments Continue to Grow

4. Alphabet Inc (NASDAQ:GOOG)

Number of Hedge Fund Investors: 178

Mark Mahaney, Evercore ISI head of internet research, said in a recent program on CNBC that Alphabet Inc (NASDAQ:GOOG) is positioned well to gain following the recent court ruling that the company will not need to sell its Chrome business. The analyst explained why he believes the stock is undervalued:

“First the core catalyst has got to be they got to maintain that double digit search revenue growth they’ve been at 11%, 12%, 13% for about two years now we think that we think that will continue because what’s underappreciated by the market is the quality of Google leads is actually rising and it’s kind of the law of unintended consequences you show people fewer paid clicks so that when they click on them, they’re less casual. They’re more they’re more conscious, determined, whatever it is. But the marketers we talk with, the advertisers are seeing higher quality leads coming from Google. That’s causing pricing to go up. That’s a good thing for Google. And then secondly, just like Meta, Google has been able to use Gen AI to improve its ad targeting, its ad selection. So, you’ve got a a search marketplace that’s getting better. That’s your core catalyst that that continues. Then you got what I call the amplification catalyst. That’s YouTube revenue that’s accelerating. That’s Google cloud revenue that’s accelerating. And then Whimo is coming to a town near you. And you put all that together, I think the stock’s worth more. You put a 25 multiple on this next year’s numbers. You get to like 275 on 2027 earnings numbers. You get to 325. So somewhere in between there is probably where the stock can go called 300 bucks.”

Pershing Square Holdings stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, is successfully executing on its vast AI potential. The company’s key advantages – stemming from industry-leading models, a full-stack approach to technical infrastructure (including proprietary chips), access to high-quality data, rapidly improving product launch velocity and a robust distribution ecosystem of seven different apps with over two billion users each – are beginning to meaningfully widen Google’s moat and competitive differentiation in AI.

In its core Search product, the company’s AI leadership is most evident in its broad roll-out of AI-powered summary responses, called “AI Overviews”. AI Overviews are now being served to more than two billion users across 200 countries, making it the most widely used consumer AI product. AI Overviews are resulting in users asking more detailed questions, clicking through at higher rates and searching with greater frequency. On the back of AI Overviews’ success, the company has also introduced “AI Mode”, which more closely resembles a chat-like user experience, directly onto the Search page…” (Click here to read the full text)