3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Funds: 288
Jim Cramer has openly regretted selling Alphabet Inc. (NASDAQ:GOOGL) shares due to AI-related threats and regulatory pressures. Cramer was uncertain whether the company would be able to keep its search dominance as more and more people turn to chatbots for answers. But the remarkable turnaround Alphabet Inc. (NASDAQ:GOOGL) made with its Gemini product made Cramer rethink his decision. He later bought back the stock for the Charitable Trust.
In November, he explained the story and comeback of Alphabet Inc. (NASDAQ:GOOGL).
“Alphabet already had a big leg up on other challengers to OpenAI,” Cramer said. “That’s because they figured out how to link Google the search company to Gemini, the AI company, in a seamless way. It’s a remarkable feat that many people thought there’d be a ton of cannibalization, but they just combined them onto the same page. The geniuses behind Alphabet and I mean geniuses, managed to figure out how to take advantage of Google to build Gemini, so it was never hard to find. But it’s only with this Gemini three that there’s a real breakout in the stock.”
Cramer said that the market realized Alphabet Inc. (NASDAQ:GOOGL) remains undervalued among the Mag. 7 group and started piling into it. However, he said the stock has more room to run. In a separate program, he said the stock can rise to $400.
“I don’t think Google stops here,” Cramer said. “I think Alphabet goes straight shot to 400. Straight shot.”
Jensen Quality Growth Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its fourth quarter 2025 investor letter:
“The leading individual contributors during the quarter were Eli Lilly (LLY) and Alphabet Inc. (NASDAQ:GOOGL). Alphabet was another key contributor in Q4 as the market placed greater weight on evidence that its AI strategy is strengthening – rather than threatening – its core franchises, while also improving the medium-term growth profile of Google Cloud. Investors responded to signs of steady advertising fundamentals (Search and YouTube) alongside continued cloud momentum, including better visibility from contracted demand and a clearer path to operating leverage as the business scales. The quarter reinforced Alphabet’s “quality growth” attributes: durable demand, scale advantages, and disciplined cost management that can support attractive earnings power even as the company invests aggressively.
We continue to view Alphabet as unusually well positioned across the AI stack – owning differentiated infrastructure, frontier models, and global distribution – allowing it to monetize AI through multiple channels (ad relevance, consumer features, and enterprise cloud). Near-term results may remain somewhat noisy given elevated capex and depreciation associated with data center and AI build-out, but the strategic logic is intact: fund long-duration opportunities from a highly cash-generative core. Ongoing regulatory scrutiny and competitive dynamics are real but appeared more “known” and less incremental during the quarter, enabling fundamentals and execution to drive the stock’s contribution.”
