Mar Vista Investment Partners, LLC, an investment management company, released its “Mar Vista U.S. Quality Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities experienced a strong momentum in 2025 and marked their second consecutive year of double-digit gains. The market witnessed one of the fastest recoveries following its dip into bear territory in April. Market leadership continued to narrow as Mega-cap stocks and AI-driven companies dominated the landscape. Against this backdrop, The Mar Vista’s U.S. Quality strategy reported +0.20% net-of-fees gains in Q4 2025 vs. the Russell 1000® Index’s +2.41% return and the S&P 500® Index’s +2.65% return. Stock selection in the communication services, consumer discretionary, and financials sectors was favorable to its performance, while stock selection in information technology, materials, and healthcare detracted from its performance. The letter also shared that, in 2026, markets will need to strike a balance between strong fundamentals and increasing economic uncertainties. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Mar Vista U.S. Quality Strategy highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG) stood out as the leading performer of the strategy in the quarter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. On January 12, 2026, Alphabet Inc. (NASDAQ:GOOG) stock closed at $332.73 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was 7.57%, and its shares gained 73.04% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $4.017 trillion.
Mar Vista U.S. Quality Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2025 investor letter:
“Alphabet Inc.’s (NASDAQ:GOOG) Q4 performance marks a significant triumph, characterized by a rare “beat and raise” narrative across all critical business segments. The company’s recent earnings report was driven by a balanced contribution from its legacy Search and YouTube divisions, with Google Cloud emerging as the standout performer. Cloud’s revenue growth reached an impressive 34%, and it boasts an extraordinary $155 billion backlog, a nearly double increase compared to the previous quarter. This remarkable transformation has propelled Cloud from a margin drag to a high-octane profit center. Operational leverage indicates that Alphabet is successfully scaling its infrastructure while maintaining disciplined cost controls.
Strategically, the “AI-first” pivot has transcended its initial roadmap status and become a tangible driver of user engagement and enterprise spending. The milestone of 650 million monthly active users on the Gemini App serves as a tangible counter-narrative to concerns about AI-driven search disruption. By integrating Gemini across its entire ecosystem, Alphabet has fortified its competitive advantage, enabling it to defend its search franchise while simultaneously capturing new market share in the enterprise cloud sector. This fundamental strength underpins a trajectory of high-teens EPS growth, making a 20x–25x earnings multiple appear conservative despite the stock’s recent appreciation.”
Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the third quarter which was 178 in the previous quarter. In the third quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved its first-ever $100 billion in revenue. While we acknowledge the risk and potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that some 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 Alphabet Inc. (NASDAQ:GOOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared the list of AI stocks investors are watching closely. In addition, please check out our hedge fund investor letters Q4 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.
