We recently published a list of 10 Best Stocks to Buy and Hold for 20 Years. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other best stocks to buy and hold for 20 years.
As per Ameriprise Financials, the initial months of 2025 were tough for investors. This is because leading US stock indexes ended the first quarter meaningfully lower, countering the investor projections that stocks will continue to move northwards after the 2 strong years of returns. Notably, the tariff uncertainty has impacted the markets this year, while recession odds are increasing, and global trade frictions continue to increase. Since major market areas have corrected from the recent highs, and the outlook has become guarded, the investment firm believes that maintaining a balanced perspective of current conditions remains important during periods of market stress.
What Lies Ahead in Q2 2025?
Ameriprise Financial opines that Q2 2025 is expected to bring as much uncertainty and volatility for investors as Q1 2025. That being said, the investment firm believes that the bullish case for stocks is expected to prevail long term, considering the current firm US economic and profit conditions. However, the threat of Trump’s tariff policies and the possible retaliatory tariffs can change the broader market dynamics.
Nevertheless, the investors should not deviate from the well-diversified portfolio. As per Ameriprise Financial, the investors are required to focus on holding high-quality assets throughout their portfolio, make sure that their allocations are in line with their risk tolerance, and that they take a longer-term view of the current market stress, which, historically, can result in opportunities to dollar-cost average in the high-quality assets.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
What Could Support Equities?
As per Ameriprise Financial, if a recession is avoided, considering the recent tariff dynamics, the current stock levels can provide attractive entry points for investors who plan to dollar-cost average in the volatility. Furthermore, the US economy and S&P 500 Index corporate profits are projected to grow, says the firm. While it remains difficult to project where the economy and corporate profits can move over the near-to-intermediate term as a result of current tariff policies, the US economy and corporate earnings are expected to remain positive in H1 2025, says Ameriprise Financial.
The corporate profit margins are at strong levels relative to history, which can support companies in navigating tariff worries and stabilize demand and profits, especially if these tariff impacts are temporary. On average, when the sentiment is significantly weak and there is increased uncertainty about policy, some clarity emerges. And with this, the stock performance tends to improve over the upcoming 6 to 12 months, says the investment management firm.
Our Methodology
To list the 10 Best Stocks to Buy and Hold for 20 Years, we sifted through several financial media reports to choose well-established and stable companies. After getting an extended list of the stocks, we shortlisted the ones that were the most popular among hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Morningstar gave a wide moat rating on Alphabet Inc. (NASDAQ:GOOGL), which stems from its intangible assets, network effect, cost advantage, and customer switching costs. As per the firm, Alphabet Inc. (NASDAQ:GOOGL)’s advertising business happens to be a cash-generating machine. Together with advertising, the company continues to make progress on diversifying cash generation, with Google Cloud and YouTube subscription sales regarded as additional FCF drivers, opines Morningstar. Over the next few decades, the company’s search business can continue to sustain its dominance in the broader industry.
Even Morningstar analyst Ahmed Khan lauded Alphabet Inc. (NASDAQ:GOOGL)’s search engine business, which tends to utilise significant amounts of data it garners to improve search results and the targeting of adverts. The analyst believes that it’s difficult to overstate the dominance of this business, even though there are potential threats such as AI search and Tik-Tok. Justin Post, an analyst from Bank of America Securities, has expressed optimism around the company’s stock. As per the analyst, Alphabet Inc. (NASDAQ:GOOGL)’s advancements in AI and strategic investments in AI-related technologies can result in new monetization opportunities. Also, the introduction of the Gemini app, as well as its emphasis on operational efficiency, aids its growth prospects.
Overall, GOOGL ranks 3rd on our list of best stocks to buy and hold for 20 years. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.