Here's why Alphabet (GOOG) is on the Detractors' list of Impax US Sustainable Economy Fund

Impax Asset Management, an investment management company, released its “Impax US Sustainable Economy Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q3 2025, the portfolio lagged behind the Russell 1000. Similar to the second quarter, the US equity markets favored a risk-on approach, benefiting high-risk, high-momentum, and lower-quality factors. Although the portfolio’s focus on relatively modest, lower-risk, and high-quality factors contributed to the underperformance, the fund (Institutional Class) returned 7.33% in Q3 compared to 7.99% for the Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Impax US Sustainable Economy 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. On January 6, 2026, Alphabet Inc. (NASDAQ:GOOG) stock closed at $314.55 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was -2.01%, and its shares gained 60.99% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $3.797 trillion.

Impax US Sustainable Economy Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:

"Alphabet Inc. (NASDAQ:GOOG) (Communication Services, Interactive Media & Services), an underweight in the portfolio, marked its strongest quarterly gain in nearly two decades, driven by a mix of AI related services and innovation, strong financial results, and regulatory relief. The company delivered mid-teens revenue growth in the quarter, with cloud growth and significant backlogs demonstrating continued demand for cloud services. The stock also benefitted from the better-than-expected regulatory relief as the courts rejected the harshest remedies laid out by the US Department of Justice."

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 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 American stocks to buy and hold in 2026. 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.