6. Alphabet Inc. (NASDAQ:GOOGL)
YTD Stock Performance: +10%
Philippe Laffont’s Stake: $2.14 Billion
Despite fears that AI would crush Alphabet Inc’s (NASDAQ:GOOGL) bread and butter (Google search business), the stock is up more than 100% over the past 12 months. But can it keep running?
Alphabet Inc. (NASDAQ:GOOGL) is using the obstacle as a way of growth. It proactively embraced AI and used its giant ecosystem to its advantage. Google still has over 90% of the total market share in search. Google Gemini App has reached 750 million monthly active users (MAU)—a massive surge from the 450 million seen at the start of 2025. Alphabet shows ads in about 25% of these AI results to capture users with strong intent for shopping.
Alphabet Inc. (NASDAQ:GOOGL) is also foraying into the AI hardware space. Google is reducing its reliance on expensive Nvidia chips by developing its own hardware, known as Tensor Processing Units (TPUs). A long-term deal with Broadcom secures this chip supply through 2031, helping Google lower costs while building a massive AI infrastructure. External companies are already buying into this system, with Anthropic planning to use 3.5 gigawatts of Google’s TPU power starting in 2027. This shift shows that Google is successfully turning its custom silicon into a high-demand product for the broader AI market.
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.
While we acknowledge the potential of GOOGL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has 100x upside potential, check out our report about the cheapest AI stock.
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