We recently published a list of 12 Best FAANG+ Stocks to Invest in Right Now. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other best FAANG+ stocks to invest in right now.

The group of stocks formerly known as FAANG were synonymous with technological prowess, market dominance, and high growth. These companies provided exponential returns and offered the chance to be part of the technological revolution. Their rise to dominance was fueled by innovation, digital transformation, the increasing use of the internet, and their insatiable hunger for growth. In the process, they reshaped industries, altered consumer behavior, and redefined customer engagement. However, over the past couple of years, the acronym has lost some of its relevance as some names have changed and new companies have encroached on the territories of these mega-caps. As a result, the market has started using the term “Magnificent Seven” to better represent the most valuable tech stocks. In this list, we include the ‘Magnificent Seven’ plus five interesting stocks that focus on the transformational technology growth trends such as artificial intelligence, cloud computing, EV technology, and streaming.

Let’s begin by understanding the sheer magnitude of these stocks. We created an equal-weighted portfolio (equal investment in each stock) of all 12 mega-cap technology stocks in this list and compared their combined performance with the S&P 500 Index over the past 5 years. Astonishingly, the mega-caps portfolio has returned over 385% compared to the S&P 500 Index’s return of around 86%. Additionally, these 12 stocks now have a combined market cap of over $20.0 trillion, with around $14 trillion added in the past 5 years. In comparison, the total market cap of all US-listed stocks is approximately $60.5 trillion (as of December 2024; source: Wilshire 5000 Index), making these mega-caps account for nearly one-third of the total US market value. Although it’s not entirely fair to compare market caps to GDP, if we could, and if these 12 mega-caps formed a country, they would rival China as the second or third largest country by nominal GDP.

Despite recent intense competition, challenging market dynamics, and a difficult regulatory environment, these tech leaders still stand tall with their legacy of innovation and digital transformation. We believe their substantial investments in technology infrastructure, strategic acquisitions, international expansion, and continuous innovation have helped them maintain their dominance. Additionally, the rise of artificial intelligence and machine learning has opened new avenues for growth among these tech giants.  With that, let’s explore these 12 stocks.

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Out Methodology

To identify the 10 best FAANG+ stocks, we compiled a list of U.S.-listed technology companies with largest market capitalization, along with the stocks from the FAANG acronym. Ultimately, the stocks were ranked in ascending order based on their market capitalization, with the stock having the highest market capitalization ranked at the top.

Note: All pricing data is as of market close on January 31.

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Alphabet Inc. (NASDAQ:GOOGL)

Number of hedge funds: 202

Alphabet Inc. (NASDAQ:GOOGL) is the parent company of Google and a pioneer in internet-related services and products, including online advertising technologies, search engines, cloud computing, software, and hardware. The company is also a leading investor in data centers and fiber networks, operating a vast global network of data centers that support its cloud services and other digital offerings. Its market cap currently stands at $2.5 trillion, up from $880 billion five years ago.

Alphabet Inc. (NASDAQ:GOOGL) continues to strengthen its position in the cloud computing market, which has experienced rapid growth in recent years and is expected to expand significantly in the coming years. The company has been heavily investing in expanding its data center infrastructure to meet the increasing demand for its Google Cloud services. With a focus on AI and machine learning, Alphabet Inc. (NASDAQ:GOOGL) is well-positioned to capitalize on the growing need for data processing and storage solutions. The company continues to report strong operating performance, with Q3 2024 showing a 35% year-over-year growth in cloud revenue, driven by the integration of AI, which is attracting new customers and larger deals. YouTube revenue also continues to show healthy growth. However, Alphabet’s dominance is also subject to regulatory challenges, such as anti-trust lawsuits, which remain a risk.

Analyst views remain broadly positive regarding Alphabet Inc. (NASDAQ:GOOGL)’s growth prospects. Bernstein analyst recently raised his price target to $210 from $185 while maintaining his Market Perform rating. An Oppenheimer analyst also raised his price target to $225 from $215 and maintained his Outperform rating. For the upcoming Q4 2024 earnings results, the analyst expects strong advertising trends and search revenue concerns to be offset by better profitability. Additionally, positive indicators from Meta Platform’s results and its ad pricing growth due to GenAI also bode well for the company.

Overall, GOOGL ranks 4th on our list of best FAANG+ stocks to invest in right now. While we acknowledge the potential of GOOGL to grow, our conviction lies in the belief that 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 GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.