Billionaire David Abrams’ 10 Stock Picks with Huge Upside Potential

5. Alphabet Inc. (NASDAQ:GOOGL)

Abrams Capital Management’s Stake: $402.10 million

Number of Hedge Fund Holders: 234

Average Upside Potential as of May 8: 32.12%

Alphabet Inc. (NASDAQ:GOOGL) is a technology company that provides web-based search, consumer content, and advertisements through its subsidiaries. It operates through several segments, like Google Services, Google Cloud, and Other Bets. Its Gemini AI model, which is now in version 2.0, powers major services and advances scientific breakthroughs like AlphaFold.

On April 25, BMO Capital analyst Brian Pitz reiterated his bullish stance on the stock and highlighted that the AI overviews in search, which were introduced recently, are being increasingly adopted. AI overviews now reach over 1.5 billion users per month. This reflects a 50% increase in users since October 2024. Due to AI advancements in Q1 2025, the company’s total revenue grew by 12% year-over-year.

The launch of Gemini 2.5 also boosted this performance. It’s now integrated into all 15 platforms with over 500 million users. AI tools like Gemini Pro, Flash, and open-source Gemma models drove developer growth, with AI Studio usage up 200%. Google Cloud also expanded 28% to $12.3 billion in Q1 with new AI infrastructure and tools for enterprises, such as the Agent Development Kit and Vertex AI.

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.”