What Makes Alphabet (GOOG) in The Detractors' List of The London Company Large Cap Strategy?

The London Company, an investment management company, released “The London Company Large Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The US equities experienced a correction in the first quarter following two years of robust performance. The portfolio returned 2.4% (2.3%, net) during the quarter compared to a 4.5% increase for the Russell 1000 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, The London Company Large Cap Strategy 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 1.39%, and its shares lost 6.42% of their value over the last 52 weeks. On May 13, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $160.89 per share with a market capitalization of $1.94 trillion.

The London Company Large Cap Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

"Alphabet Inc. (NASDAQ:GOOG): GOOG was a bottom performer this quarter despite strong results from its ad business, Cloud growth, and margin enhancements. Unexpectedly high capex guidance and Al search alternatives pressured the stock. GOOG has a solid balance sheet, significant market share, and generates strong returns on invested capital."

Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 174 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 160 in the previous quarter. In the first quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue of $90.2 billion, representing an increase of 12% or 14% in constant currency. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared the list of advertising & media stocks that could tank if recession hits. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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