4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q4: 234
Pershing Square’s Equity Stake: $1.44 Billion
Upside Potential as of May 5: 22.06%
Alphabet Inc. (NASDAQ:GOOGL), a parent company of Google, remains a central figure in the technology sector and is currently the only tech stock held by Bill Ackman’s Pershing Square. As such, it serves as the hedge fund’s sole exposure to the booming artificial intelligence (AI) industry, making it a critical strategic investment. Among Ackman’s portfolio, Alphabet stands out with a notable upside potential of 22.06%, positioning it as one of the top stocks with significant growth prospects. The company has also seen increasing hedge fund interest—by the end of Q4 2024, 234 hedge funds out of 1,009 tracked by Insider Monkey held stakes in GOOGL, up from 202 funds in the previous quarter. The total value of these holdings reached $39.59 billion, indicating rising confidence among institutional investors.
For the first quarter of 2025, Alphabet Inc. (NASDAQ:GOOGL) reported stronger-than-expected financial results, with earnings per share (EPS) of $2.81 and revenue of $90.2 billion. These figures surpassed analysts’ estimates, which had projected EPS of $2.01 on revenue of $89.1 billion. Comparatively, during Q1 of the previous year, the company posted EPS of $1.89 on revenue of $80.5 billion, highlighting substantial year-over-year growth. A major contributor to this performance was Google’s advertising division, which brought in $66.8 billion, slightly above the anticipated $66.4 billion. Meanwhile, the Google Cloud Platform generated $12.2 billion in revenue, just below the $12.3 billion forecast, but still a marked improvement from the $9.5 billion it posted in Q1 2024.
Despite these strong financial results, Alphabet Inc. (NASDAQ:GOOGL) is facing significant regulatory challenges. In April 2025, a U.S. federal judge ruled that Google maintains an illegal monopoly over the online advertising market, a decision that could compel the company to divest or reorganize its advertising operations. This ruling comes on the heels of another antitrust loss less than a year earlier, in which Google’s search and ad businesses were also found to be in violation of U.S. antitrust laws. These ongoing legal battles cast uncertainty over parts of Alphabet’s core business, even as it continues to grow its revenues and deepen its presence in the AI space.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
