Is Alphabet (GOOG) Trading at an Attractive Valuation?

Artisan Partners, an investment management company, released its “Artisan Select Equity Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The US market was one of the world’s worst-performing markets in Q1. Against this backdrop, the fund’s Investor Class ARTNX, Advisor Class APDNX, and Institutional Class APHNX returned 5.79%, 5.85%, and 5.82%, respectively, in the first quarter, compared to a -4.27% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Artisan Select Equity Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 9.99%, and its shares lost 3.49% of their value over the last 52 weeks. On June 5, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $169.81 per share, with a market capitalization of $2.05 trillion.

Artisan Select Equity Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

“Our worst performing stocks in the quarter were Alphabet Inc. (NASDAQ:GOOG), PayPal and American Express. Alphabet’s shares were down 18% during the quarter. It’s always tempting to try diagnosing why a company’s share price moved. We could discuss the implications of AI, regulatory issues and its $32 billion acquisition of cloud security provider Wiz. All of these are worthy fundamental issues. However, its shares fell about as much as the other Magnificent Seven stocks. Google’s operating performance remains good. It is investing a massive amount of capital expenditures (capex) in AI infrastructure this year, which is sensible given it is well positioned to be a leader in this field. The valuation is now far more attractive than it was at the end of last year.”

Alphabet Inc. (GOOG)’s AI Ad Strategy Expands Reach—But Analyst Keeps Neutral Stance

A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.

Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 164 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 174 in the previous quarter. In the first quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue of $90.2 billion, representing an increase of 12% from Q1 2024. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared RiverPark Large Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.