Is Alphabet Inc. (NASDAQ:GOOGL) the Best NASDAQ Stock to Buy So Far in 2025?

We recently published a list of 13 Best NASDAQ Stocks to Buy So Far in 2025. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other NASDAQ stocks to buy in 2025.

On April 4, Wedbush analyst Dan Ives appeared on CNBC to discuss the potential impact of current tariffs and compared the situation to an economic armageddon. If the current tariffs remain in place, Ives thinks it would lead to a 15% to 20% demand reduction across the board. He thinks that investor anxiety is much higher considering how things were in the March 2020 COVID-19 crash earlier. The analyst thinks that investors should now focus on the likelihood of tariff adjustments from comments about negotiations, the impact on consumer-focused companies, and the potential for demand destruction. He even thinks that companies may refuse to provide guidance in the first-quarter earnings calls due to the persistent tariff uncertainty.

Ives thinks that a lot of tech companies will not be able to absorb high tariff increases and rather this cost will be passed on to the consumers which will lead to significant margin erosion and even potential sales declines. He indicated that tech stocks are currently pricing in a 10% to 15% cut to numbers. He suggests that investors should now look at companies with strong long-term potential as he believes earnings may normalize in 2025 and 2026. The analyst also addressed the defensive performance of defense contractors. While acknowledging the relative stability here, Ives cautioned that even these even such sectors are not immune to tariffs. He noted the significant foreign component, specifically 40% to 50% in some instances, in hardware and other sectors.

Our Methodology

We sifted through the financial media reports to compile a list of the top NASDAQ stocks to buy for 2025. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL) is a tech company that operates through three segments. The Google Services segment provides products and services like ads, Chrome, Gmail, and YouTube. The Google Cloud segment offers AI infrastructure, Vertex AI platform, cybersecurity, and data & analytics, among others. The Other Bets segment sells healthcare-related and internet services.

On March 31, Ken Gawrelski, an analyst at Wells Fargo, reaffirmed an Equal Weight rating on the company while lowering the price target to $167 from $184. This cautious sentiment is a result of the company’s current trough multiples and bearish investor sentiment. This is because they believe that Google’s search business is put at risk by new AI-related technologies.

However, the increasing demand for AI infrastructure and GenAI solutions has improved the adoption of GCP (Google Cloud Platform). GCP recently outpaced the entire cloud market. The company’s overall Cloud segment rose by 30$ year-over-year in Q4 2024. Notably, the company’s 6th-gen TPU called Trillium enhances AI workload significantly. Alphabet Inc.’s (NASDAQ:GOOGL) AI-developed platform called Vertex AI increased its customers by fivefold in Q4.

Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”

Overall, GOOGL ranks 4th on our list of the best NASDAQ stocks to buy so far in 2025. While we acknowledge the growth potential of GOOGL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.