Here's What Led Alphabet's (GOOGL) Strong Performance

Qualivian Investment Partners, an investment partnership focused on long-only public equities, released its Q3 2025 investor letter. A copy of the letter can be downloaded here. The fund outperformed the iShares MSCI USA Quality Factor ETF (QUAL) by 69.2% and 61.3% on a gross and net basis, since inception through September 30, 2025. It also exceeded the S&P 500 by 32.7% and 26.1% respectively, on a gross and net basis. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letterQualivian Investment Partners highlighted stocks such as Alphabet Inc. (NASDAQ:GOOGL). Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return for Alphabet Inc. (NASDAQ:GOOGL) was -4.22%, and its shares gained 57.96% over the last 52 weeks. On December 22, 2025, Alphabet Inc. (NASDAQ:GOOGL) stock closed at $309.78 per share, with a market capitalization of $3.752 trillion.

Qualivian Investment Partners stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its third quarter 2025 investor letter:

"The S&P 500's performance in Q3 2025 was primarily driven by two key themes: continued investment and enthusiasm for Artificial Intelligence (AI), and the Federal Reserve's delivery of its first interest rate cut since 2024, which boosted investor risk appetite. Sector rotation saw Information Technology (especially semiconductors) and Communication Services maintain leadership due to AI-related growth. Also, market breadth improved as small-cap stocks staged a significant rally, though defensive sectors like Consumer Staples and Healthcare generally lagged. Within that context, our top 3 contributors in the quarter were Alphabet Inc. (NASDAQ:GOOGL), O’Reilly Automotive (ORLY), and TJX Corp. (TJX).

Alphabet's Q3 2025 results saw the company deliver its first-ever $100 billion-plus quarter, with consolidated revenue increasing 16% year-over-year to $102.3 billion, and diluted earnings per share (EPS) rising 35% to $2.87. This record performance was driven by double digit growth across all major segments, including Google Search and YouTube ads, with Google Cloud revenues accelerating 34% due to strong enterprise and AI-related customer demand."

Alphabet Inc. (NASDAQ:GOOGL) is in fourth position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 243 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOGL) at the end of the third quarter, up from 219 in the previous quarter. In the third quarter of 2025, Alphabet Inc. (NASDAQ: GOOGL) achieved its first-ever $100 billion in revenue. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOGL) 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 AI stocks making waves on Wall Street. 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.