Top 10 Stocks to Watch After Federal Reserve’s Rate Cut

2. Alphabet Inc (NASDAQ:GOOG)

Number of Hedge Fund Investors: 178

Philip G. Palumbo, Founder, CEO and Chief Investment Officer of Palumbo Wealth Management, said in a program late July on Schwab Network that AI-related concerns about Alphabet’s search business are overdone and the company’s cash flow generation is “not going to stop.”

“Google for us is a company where I really do believe the whole death of search which is most investors believe is happening is not happening. If you look at Google’s earnings yesterday, they were really terrific. They really nailed it in terms of search. You know, their their user visits are up four times over the past year and and just Google as a whole has incredible infrastructure. So, we see that business as a cash flow generated machine that’s not going to stop.”

Alphabet Inc. (NASDAQ:GOOG) bulls believe concerns around AI-related threats to Google search are overstated. Google has an edge over competitors because it’s easier for the billions of users of its search engine to switch to Gemini instead of opting for a completely new model. As of April, Google had over 1.5 billion monthly users interacting with its AI-powered Search overviews.

Google’s competitor OpenAI failed to impress the market with its GPT-5 model, while Gemini is gaining traction with new features. Analysts believe the company is strongly positioned to start placing ads in AI search results, which means its core ads business will not be impacted despite the decline in traditional search.

Pershing Square Holdings stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, is successfully executing on its vast AI potential. The company’s key advantages – stemming from industry-leading models, a full-stack approach to technical infrastructure (including proprietary chips), access to high-quality data, rapidly improving product launch velocity and a robust distribution ecosystem of seven different apps with over two billion users each – are beginning to meaningfully widen Google’s moat and competitive differentiation in AI.

In its core Search product, the company’s AI leadership is most evident in its broad roll-out of AI-powered summary responses, called “AI Overviews”. AI Overviews are now being served to more than two billion users across 200 countries, making it the most widely used consumer AI product. AI Overviews are resulting in users asking more detailed questions, clicking through at higher rates and searching with greater frequency. On the back of AI Overviews’ success, the company has also introduced “AI Mode”, which more closely resembles a chat-like user experience, directly onto the Search page…” (Click here to read the full text)