Here's Why Alphabet (GOOG) Offers a Compelling Reward-To-Risk Opportunity

Loomis Sayles, an investment management company, released its “Global Growth Fund” investor letter for the third quarter of 2025.  A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.59% compared to 7.62% for the MSCI ACWI Index Net. The firm seeks to invest in high-quality businesses that possess sustainable competitive advantages and experience profitable growth, especially when these companies are trading at a substantial discount to their intrinsic value. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Loomis Sayles Global Growth Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 11.01%, and its shares gained 76.86% of their value over the last 52 weeks. On November 21, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $299.65 per share, with a market capitalization of $3.617 trillion.

Loomis Sayles Global Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) is a holding company that owns a collection of businesses, the largest and most important of which by far is Google. Google is the global leader in online search and advertising and also offers cloud solutions to businesses and consumers globally, with a goal of organizing the world’s information and making it universally accessible and useful. Google dominates the US and global traditional search market with a greater than 80% share of search volumes. As a function of seeing more searches, Google is able to provide better search results, resulting in a higher customer conversion rate for advertisers and enabling Google to capture a leading share of search revenue. Google’s large network of consumers, advertisers, and publishers is a powerful business ecosystem as third-party participants such as marketing affiliates and independent software vendors add value to the user experience. As a result, we believe consumers get their best and most relevant search results and advertisers get the best returns on their advertising dollars. Such a robust ecosystem attracts increasing numbers of participants and thereby creates a virtuous cycle for a sustainable business model and long-term growth. In its emerging cloud business, we estimate that Google captures less than 10% market share of the global market for public cloud services. We believe Google remains one of the few global companies that has the scale, research and development (R&D), and technical talent to effectively compete in this market over the long term. Non-Google businesses comprise less than 1% of Alphabet revenues and are held in the company’s Other Bets segment.

A holding in the fund since inception, shares responded positively following disclosure of prospective remedies in an ongoing lawsuit with the U.S. Department of Justice (DOJ) that were better than feared. In August 2024, in a case originally filed in 2020 by the DOJ and multiple U.S. states, a U.S. District Court ruled that Google had acted illegally to maintain a monopoly in online search by paying companies such as Apple to present its search engine as the default choice on their devices and web browsers. During the quarter, the judge provided potential remedies which neither required any business divestitures by Alphabet, nor called for an outright ban on payments. The company has said it may potentially still appeal both the verdict as well as the proposed remedies, but the remedies were less punitive than feared. We expect this process will likely still take over a year before it is ultimately settled and any changes are implemented. And while we do not know what the final outcome will be, based on its ongoing innovation and substantial competitive advantages, we do not believe the company’s competitive positioning will ultimately be diminished, and we believe the company continues to represent an attractive reward-to-risk opportunity…” (Click here to read the full text)

Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 178 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 164 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 potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared the list of best communication and media stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.