Alphabet (GOOGL) is Continuing Its Developments in Strong AI Launches

Patient Capital Management, a value investing firm, released its “Patient Opportunity Equity Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, Patient Opportunity Equity Strategy returned 5.99% net of fees, compared to its unmanaged benchmark, the S&P 500 Index, which returned 2.65%. Through a three-factor performance attribution model, the portfolio's outperformance was attributed to allocation, selection, and interaction effects. The market ended a strong year with 17.9% returns, marking the seventh-best three-year period in market history. 2025 was a year of AI, extending the benefits to hardware, energy, and component suppliers across the ecosystem. Seven stocks accounted for over half of the S&P 500’s returns, posing difficulties for active managers. Nevertheless, the strategy performed well, outperforming the S&P 500 for the third consecutive year with a return of 26.1%. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Patient Opportunity Equity Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOGL). Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence, and is a significant contributor to the fund’s performance in the quarter. On March 04, 2026, Alphabet Inc. (NASDAQ:GOOGL) stock closed at $303.13 per share with a market capitalization of $3.67 trillion. One-month return of Alphabet Inc. (NASDAQ:GOOGL) was -8.49%, and its shares gained 75.88% of their value over the last 52 weeks.

Patient Opportunity Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its fourth quarter 2025 investor letter:

"Alphabet Inc. (NASDAQ:GOOGL) was a top contributor in the fourth quarter, continuing its upward trajectory on successively strong AI launches and gaining 28.1% in the period. We started the year with the prevailing narrative that Alphabet was an AI laggard and are now ending the year with the company firmly in the winner camp. We have long believed the market was underappreciating Google’s strong technology and AI advantages, with its Gemini model being integrated across search, YouTube advertising, and its cloud offering. We continue to believe that Google is well positioned to take advantage of the AI revolution. We see additional upside as Google is uniquely positioned to monetize advances at scale. Despite the strong move, we continue to find the company attractive when considering all its market-leading assets."

Alphabet Inc. (NASDAQ:GOOGL) is in third position on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 288 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOGL) at the end of the fourth quarter, up from 243 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ: GOOG) achieved its first-ever $400 billion annual 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:GOOGL) and shared a list of best WallStreet bets stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q4 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.