We recently compiled a list of the 8 Good Stocks To Buy Right Now. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other good stocks to buy right now.
Stocks to Perform Well in 2025
On October 14, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared in an interview on CNBC to discuss the latest market trends and share his expectations.
In a previous interview, Lee hinted that a period of market volatility is expected, as 2024 heads for a soft landing. However, in this interview, Lee revealed that he had underestimated the market and that it had been extremely resilient and confident, contrary to what he believed earlier. He adds that this indicates the decreasing importance of macroeconomic data to investors.
Lee also adds that for the past two years, investors have been expecting a recession and have held back. Henceforth, with all this cash on the sidelines, investors have been more than willing to invest. October so far has been a great month for the market, despite CPI data being higher than expectations.
Lee emphasizes the need for the Fed to be more supportive as concerns over the job market rise and the upcoming election draws closer. He suggests that despite the election results he expects stocks to perform well in 2025.
The Fed Should Go Slower, Strategist Says
The market rose to an all-time intraday earlier today and the Fed governor stressed the need for caution amid decreasing interest rates. On October 15, Warren Pies, from 3Fourteen, appeared in an interview on CNBC to discuss his market thesis for the rest of the year.
Pies suggests that rates are the biggest risk to the market at the moment, especially if drastic measures are introduced. He further adds that if the Fed decides to bring the rate down to 3% immediately, the long-term market outlook could be extremely volatile.
He explained that the concern is more about the rate of change and not the absolute level the Fed is trying to achieve. Pies adds that the market still has a lot of room to run before another drastic cut is implemented. He emphasized that the Fed must operate at a pace the market can digest. He also suggested that the market has started to reaccelerate, hinting that a soft landing is more likely.
Now that we have studied the market outlook up until the end of 2024, let’s take a look at some of the good stocks to buy right now.
Our methodology
We used a consensus-based approach and sifted through financial media reports to first compile a list of good stocks to buy right now. We then shortlisted and ranked these stocks by using Insider Monkey’s hedge fund data for the second quarter of 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOGL) is one of the biggest technology companies in the world. It owns a range of products, including Google Search, Google Maps, YouTube, Google Cloud, and Wyamo.
Alphabet Inc. (NASDAQ:GOOGL) reported solid earnings in the second quarter of 2024. Its CEO, Sundar Pichai suggests that its performance was largely driven by its growing momentum in search and clod. The company logged nearly $85 billion in revenue, of which search and cloud exceeded $10 billion for the first time in quarterly revenue. The company highlights that it is investing to innovate every layer of the AI stack.
On the technology hardware front, its processing units currently account for almost 20% of the market, however, its advancements promise higher market shares in the future. In addition to that, its six-generation chips are 67% more energy efficient compared to the previous generation of processors and its new set of chips will be made available to Google Cloud users by the end of 2024.
Alphabet Inc. (NASDAQ:GOOGL) logged revenue worth $85 billion in the fiscal second quarter of 2024, driven by the growing momentum in cloud and search. The technology giant is well-positioned to benefit from the next wave of artificial intelligence and innovation, making it a solid investment. Overall, 216 investors held stakes worth $35.31 billion in Alphabet Inc. (NASDAQ:GOOGL) as of Q2 2024, according to the Insider Monkey database.
Patient Capital Management mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter“
“Alphabet Inc. (GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”
Overall GOOGL ranks 2nd among the 10 good stocks to buy right now. While we acknowledge the potential of GOOGL 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 time frame. 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.