3. Alphabet (NASDAQ:GOOGL)
Billionaire Dan Loeb’s Stake: 175,000 Shares Valued at Approximately $50.32 Million (NEW position)
Billionaire Dan Loeb piled into Alphabet (NASDAQ:GOOGL) in the first quarter and that bet proved to be profitable. The stock is up 17% so far this year.
Loeb isn’t alone in turning bullish on Google. For the past two years, Alphabet (NASDAQ:GOOGL) was widely considered the biggest loser of the AI revolution, because AI directly threatened its bread and butter — search. Why would anyone use Google Search when ChatGPT or Claude could just answer your question directly? But Alphabet turned the tables, embraced AI aggressively, and is now one of the clearest beneficiaries of the very trend that was supposed to destroy it. Its AI products and Google Cloud have become its biggest growth catalysts.
The cloud numbers tell the story. In Q1 2026, Google Cloud’s contracted backlog surged 93% on a sequential basis to $462.3 billion. These are not forecasts or wishful projections — these are signed contracts from enterprise customers who have already committed to paying Alphabet (NASDAQ:GOOGL). The company says roughly 50% of this backlog, or over $230 billion, is expected to convert into recognized revenue within the next 24 months. On top of that, Google Cloud grew 63% year-over-year in Q1 — significantly ahead of Microsoft Azure at 40% and Amazon Web Services at 28%. Google Cloud is simultaneously the third-largest cloud provider and the fastest-growing one, and management has explicitly said revenue would have been even higher if the company could physically build infrastructure fast enough to meet demand.
Another powerful growth catalyst that the market has largely missed is Alphabet’s (NASDAQ:GOOGL) chip business. Alphabet has begun selling its proprietary TPU chips — originally built exclusively for internal use — to outside customers. The early deals are with some of the most credible AI buyers in the world. Anthropic signed a deal worth up to $40 billion for TPU capacity, and Meta has signed a multi-billion-dollar deal to rent Alphabet’s TPUs, with talks reportedly underway for Meta to purchase them outright for its own data centers starting in 2027. Demand for these chips is so intense that Alphabet’s (NASDAQ:GOOGL) own DeepMind researchers have been placed in a queue, with chips being rationed away from internal teams to fulfill external orders — a signal that the product’s value is very real and the market for it is only getting bigger.
L1 Capital International Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q1 2026 investor letter:
Portfolio adjustments during the March 2026 quarter were relatively modest, but deliberate. We trimmed investments in AerCap, Alphabet Inc. (NASDAQ:GOOGL), HCA Healthcare and Weir Group at prices around the top end of our assessed fair value range, with all of these businesses benefitting from positive sentiment intra-quarter. Alphabet’s share price has more than doubled over the past 12 months. This reflects strong performance in core Search, continued momentum in Google Cloud Platform, and better-than-expected progress in AI (Gemini). Today Alphabet has a market capitalisation approaching US$4 trillion. Share prices and fair value are not always aligned, even for the world’s largest companies.
