Hedge Fund Favorites Outperform the Market, with Tesla Joining the Ranks for the First Time in Three Years.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 21 2025
0mins
Should l Buy GOOGL?
Source: MarketWatch
Hedge Fund Performance: Hedge fund favorite stocks have outperformed the broader market in 2023, with a notable return of 15% compared to 11% for the S&P 500.
Tesla's Comeback: For the first time since 2022, Tesla has made it onto the list of favored stocks by hedge funds, according to an analysis by Goldman Sachs.
Goldman Sachs Analysis: The findings are based on 13-F filings submitted to the Securities and Exchange Commission, highlighting the performance of what Goldman refers to as its “hedge fund VIP” list.
ETF Wrapper: The "hedge fund VIP" list is available through an ETF called GVIP, which tracks these high-performing stocks.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 338.25 USD with a low forecast of 279.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
27 Buy
7 Hold
0 Sell
Strong Buy
Current: 331.250
Low
279.00
Averages
338.25
High
390.00
Current: 331.250
Low
279.00
Averages
338.25
High
390.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Alphabet Plans Significant Increase in AI Investments
- Stock Price Fluctuation: Alphabet's stock closed at $331.25, down 0.54%, as investors assessed the company's plan to increase AI capital expenditures to approximately $180 billion by 2026, indicating market concerns over future cash flow and AI growth.
- Surge in Trading Volume: Trading volume reached 87.1 million shares, about 136% above the three-month average of 36.8 million shares, reflecting heightened investor interest in the company's future prospects.
- Earnings Beat Expectations: In Q4, Alphabet reported sales and earnings per share growth of 18% and 31%, respectively, surpassing Wall Street's consensus, with Google Search and YouTube showing steady growth rates of 17% and 9% each.
- Cloud Business Highlight: The cloud backlog surged 55% sequentially, more than doubling from Q4 2024, indicating strong demand in the cloud services sector, while management's confidence in AI-related spending continues to grow.
See More
Alphabet's AI-Driven Cloud Business Shows Significant Growth
- Earnings Beat: Alphabet reported fourth-quarter revenue of $113.8 billion, an 18.8% increase year-over-year, with earnings per share of $2.82, surpassing analysts' expectations of $2.63, demonstrating strong performance in a challenging environment.
- Capital Expenditure Plans: The company plans to nearly double its capital expenditures in the coming year, primarily investing in AI infrastructure; despite market concerns about tech companies' ROI on AI, Alphabet's spending is viewed as effective.
- Cloud Business Growth: Google's cloud computing segment generated $17.7 billion in revenue in Q4, a 48% year-over-year increase, with operating income more than doubling to $5.3 billion, indicating a rising contribution to overall revenue, now at 15%.
- Optimistic Market Outlook: According to Mordor Intelligence, the global AI data center industry is expected to grow at an annual rate of 25% through 2031, and with its new Tensor Processor Units, Alphabet is well-positioned to capture a significant share of this market growth.
See More
Google Cloud's Rapid Growth Highlights Alphabet's Earnings
- Strong Earnings Report: Alphabet's fourth-quarter revenue reached $113.8 billion, an 18% increase from $96.5 billion year-over-year, with earnings per share at $2.82, surpassing analysts' expectations of $2.63, demonstrating robust performance in a challenging market environment.
- Rapid Cloud Growth: The Google Cloud segment generated $17.7 billion in revenue during Q4, marking a 48% year-over-year increase, while operating income more than doubled to $5.3 billion, indicating that this division is becoming a key growth driver for Alphabet.
- Capital Expenditure Plans: The company plans to nearly double its capital expenditures in the coming year, primarily investing in AI infrastructure; despite concerns about other tech firms' insufficient returns on AI investments, Alphabet's spending is viewed as effective.
- Optimistic Market Outlook: According to Mordor Intelligence, the global AI data center industry is expected to grow at an annual rate of 25% through 2031, and with its new Tensor Processor Units, Alphabet is well-positioned to capture a significant share of this rapidly expanding market.
See More
Alphabet Reports Strong Q4 Results Amid AI Growth
- Accelerated Revenue Growth: Google Cloud's revenue growth surged to 48% in Q4, reaching $17.7 billion, with operating income skyrocketing from $2.1 billion last year to $5.3 billion, reflecting strong performance and demand in the AI sector.
- Significant Capex Increase: Alphabet plans to raise its capital expenditure budget to between $175 billion and $185 billion for 2026, significantly up from $91 billion in 2025, indicating strong confidence in future technology investments, particularly in AI and cloud computing.
- Search and Ad Revenue Growth: Google Search revenue grew 17% in Q4 to $63.1 billion, demonstrating that AI has driven an increase in search queries without negatively impacting traditional search, further solidifying its market leadership.
- Waymo Expansion and Funding: Alphabet's Waymo robotaxi service opened its sixth market in Miami and successfully raised $16 billion for its subsidiary, achieving a valuation of $126 billion, showcasing the company's ongoing expansion and investment potential in the autonomous driving sector.
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Google Cloud Revenue Soars 48%, Exceeding Expectations
- Significant Revenue Growth: Google Cloud's revenue surged 48% year-over-year in Q4 2025, reaching $17.7 billion and accounting for 15.5% of Alphabet's total sales, demonstrating the segment's robust performance amid the AI boom and solidifying the company's position in the cloud computing market.
- Profitability Improvement: The operating income for Google Cloud skyrocketed by 154% to $5.3 billion, with the operating margin nearly doubling from 17.5% to 29.9%, indicating substantial progress in cost control and efficiency enhancement, which strengthens future profitability potential.
- Market Reaction Volatility: Despite exceeding Wall Street expectations, Alphabet's stock fell 6.5% post-report, resulting in a market cap loss of approximately $250 billion over three days, reflecting investor concerns over the company's massive AI infrastructure spending, which may impact short-term investor confidence.
- Long-Term Growth Potential: Alphabet plans to double its capital expenditure budget in 2026, signaling confidence in Google Cloud's future growth, suggesting that analysts should reassess its growth prospects to reflect the segment's potential and changing market demand.
See More
Alphabet Q4 2025 Results Exceed Expectations
- Revenue Surprises: Alphabet reported Q4 2025 revenue of $17.7 billion, a 48% year-over-year increase that surpassed Wall Street estimates by 2.4%, showcasing its strong performance in the AI sector, although the stock price fell due to infrastructure spending plans.
- Significant Profitability Boost: The operating income for the quarter soared 154% to $5.3 billion, indicating rapid profitability growth in the Google Cloud segment, which further solidifies Alphabet's competitive position in the cloud computing market.
- Market Value Fluctuations: Despite a 6.5% drop in Alphabet's stock price post-earnings, resulting in a $250 billion market value loss over three days, it remains the best performer among the
See More
Alphabet Plans Significant Increase in AI Investments
- Stock Price Fluctuation: Alphabet's stock closed at $331.25, down 0.54%, as investors assessed the company's plan to increase AI capital expenditures to approximately $180 billion by 2026, indicating market concerns over future cash flow and AI growth.
- Surge in Trading Volume: Trading volume reached 87.1 million shares, about 136% above the three-month average of 36.8 million shares, reflecting heightened investor interest in the company's future prospects.
- Earnings Beat Expectations: In Q4, Alphabet reported sales and earnings per share growth of 18% and 31%, respectively, surpassing Wall Street's consensus, with Google Search and YouTube showing steady growth rates of 17% and 9% each.
- Cloud Business Highlight: The cloud backlog surged 55% sequentially, more than doubling from Q4 2024, indicating strong demand in the cloud services sector, while management's confidence in AI-related spending continues to grow.
See More
Alphabet's AI-Driven Cloud Business Shows Significant Growth
- Earnings Beat: Alphabet reported fourth-quarter revenue of $113.8 billion, an 18.8% increase year-over-year, with earnings per share of $2.82, surpassing analysts' expectations of $2.63, demonstrating strong performance in a challenging environment.
- Capital Expenditure Plans: The company plans to nearly double its capital expenditures in the coming year, primarily investing in AI infrastructure; despite market concerns about tech companies' ROI on AI, Alphabet's spending is viewed as effective.
- Cloud Business Growth: Google's cloud computing segment generated $17.7 billion in revenue in Q4, a 48% year-over-year increase, with operating income more than doubling to $5.3 billion, indicating a rising contribution to overall revenue, now at 15%.
- Optimistic Market Outlook: According to Mordor Intelligence, the global AI data center industry is expected to grow at an annual rate of 25% through 2031, and with its new Tensor Processor Units, Alphabet is well-positioned to capture a significant share of this market growth.
See More
Google Cloud's Rapid Growth Highlights Alphabet's Earnings
- Strong Earnings Report: Alphabet's fourth-quarter revenue reached $113.8 billion, an 18% increase from $96.5 billion year-over-year, with earnings per share at $2.82, surpassing analysts' expectations of $2.63, demonstrating robust performance in a challenging market environment.
- Rapid Cloud Growth: The Google Cloud segment generated $17.7 billion in revenue during Q4, marking a 48% year-over-year increase, while operating income more than doubled to $5.3 billion, indicating that this division is becoming a key growth driver for Alphabet.
- Capital Expenditure Plans: The company plans to nearly double its capital expenditures in the coming year, primarily investing in AI infrastructure; despite concerns about other tech firms' insufficient returns on AI investments, Alphabet's spending is viewed as effective.
- Optimistic Market Outlook: According to Mordor Intelligence, the global AI data center industry is expected to grow at an annual rate of 25% through 2031, and with its new Tensor Processor Units, Alphabet is well-positioned to capture a significant share of this rapidly expanding market.
See More
Alphabet Reports Strong Q4 Results Amid AI Growth
- Accelerated Revenue Growth: Google Cloud's revenue growth surged to 48% in Q4, reaching $17.7 billion, with operating income skyrocketing from $2.1 billion last year to $5.3 billion, reflecting strong performance and demand in the AI sector.
- Significant Capex Increase: Alphabet plans to raise its capital expenditure budget to between $175 billion and $185 billion for 2026, significantly up from $91 billion in 2025, indicating strong confidence in future technology investments, particularly in AI and cloud computing.
- Search and Ad Revenue Growth: Google Search revenue grew 17% in Q4 to $63.1 billion, demonstrating that AI has driven an increase in search queries without negatively impacting traditional search, further solidifying its market leadership.
- Waymo Expansion and Funding: Alphabet's Waymo robotaxi service opened its sixth market in Miami and successfully raised $16 billion for its subsidiary, achieving a valuation of $126 billion, showcasing the company's ongoing expansion and investment potential in the autonomous driving sector.
See More
Google Cloud Revenue Soars 48%, Exceeding Expectations
- Significant Revenue Growth: Google Cloud's revenue surged 48% year-over-year in Q4 2025, reaching $17.7 billion and accounting for 15.5% of Alphabet's total sales, demonstrating the segment's robust performance amid the AI boom and solidifying the company's position in the cloud computing market.
- Profitability Improvement: The operating income for Google Cloud skyrocketed by 154% to $5.3 billion, with the operating margin nearly doubling from 17.5% to 29.9%, indicating substantial progress in cost control and efficiency enhancement, which strengthens future profitability potential.
- Market Reaction Volatility: Despite exceeding Wall Street expectations, Alphabet's stock fell 6.5% post-report, resulting in a market cap loss of approximately $250 billion over three days, reflecting investor concerns over the company's massive AI infrastructure spending, which may impact short-term investor confidence.
- Long-Term Growth Potential: Alphabet plans to double its capital expenditure budget in 2026, signaling confidence in Google Cloud's future growth, suggesting that analysts should reassess its growth prospects to reflect the segment's potential and changing market demand.
See More
Alphabet Q4 2025 Results Exceed Expectations
- Revenue Surprises: Alphabet reported Q4 2025 revenue of $17.7 billion, a 48% year-over-year increase that surpassed Wall Street estimates by 2.4%, showcasing its strong performance in the AI sector, although the stock price fell due to infrastructure spending plans.
- Significant Profitability Boost: The operating income for the quarter soared 154% to $5.3 billion, indicating rapid profitability growth in the Google Cloud segment, which further solidifies Alphabet's competitive position in the cloud computing market.
- Market Value Fluctuations: Despite a 6.5% drop in Alphabet's stock price post-earnings, resulting in a $250 billion market value loss over three days, it remains the best performer among the
See More
