Heartland Advisors, an investment management company, released its “Heartland Opportunistic Value Equity Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Large- and mega-cap stocks posted another quarter of outperformance in Q4, despite a brief broad-based performance across market caps. The Russell 2000® Index of small stocks returned 2.19% in the quarter, lagging the 2.66% gain for the S&P 500. The market remains uncertain on the definitive long-term winners from the proliferation of AI. To navigate economic uncertainty, the strategy adheres to its 10 Principles of Value Investing by focusing on attractively priced, financially sound, and well-managed businesses that can grow intrinsic value. The Strategy returned 0.79% during the quarter, trailing the Russell 3000® Value Index’s 3.78% return. The Strategy remains optimistic about the market’s expansion and opportunities for growth. However, the recent volatility in AI trends highlights the need to evaluate multiple outcomes. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Heartland Opportunistic Value Equity Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOGL). Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence, and is a significant contributor to the Strategy’s performance. On March 24, 2026, Alphabet Inc. (NASDAQ:GOOGL) stock closed at $290.44 per share. One-month return of Alphabet Inc. (NASDAQ:GOOGL) was -7.18%, and its shares gained 75.96% over the past 52 weeks. Alphabet Inc. (NASDAQ:GOOGL) has a market capitalization of $3.56 trillion.
Heartland Opportunistic Value Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its fourth quarter 2025 investor letter:
“On the other side of sentiment, Alphabet Inc.’s (NASDAQ:GOOGL) Google search engine was seen as at risk of disruption by OpenAI and other AI startups. In May of 2025, shares of Alphabet were trading at a 30% discount to the S&P 500, a bargain in our opinion. Not because we ‘knew’ that Alphabet was the AI winner. Rather, we viewed Alphabet as having key assets required to be a meaningful player in the AI race (consistent free cash flow, multiple 5+ billion user apps, real-time data, cloud computing infrastructure, custom application-specific semiconductors, and its own large language model). Most importantly, the discounted valuation provided us with a margin of safety that gave us comfort in knowing that we didn’t need to be perfectly right in our assessment of the business to make money. Since May, shares of Alphabet have more than doubled.”
Alphabet Inc. (NASDAQ:GOOGL) ranks third on our list of 40 Most Popular Stocks Among Hedge Funds. As per our database, 288 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOGL) at the end of the fourth quarter which was 243 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ: GOOGL) achieved its first-ever $400 billion annual revenue. While we acknowledge the risk and potential of Alphabet Inc. (NASDAQ:GOOGL) 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:GOOGL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Alphabet Inc. (NASDAQ:GOOGL) and shared top sock picks from Jim Cramer stock portfolio. In addition, please check out our hedge fund investor letters Q4 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.
