Alphabet sits at the center of a rapid shift: AI stopped being a threat and turned into the engine that’s boosting search, YouTube, cloud and enterprise sales. This piece walks through who’s holding the stock, recent operating beats, Cloud momentum, Gemini adoption, valuation math and an investor note that trimmed at what it called the top of fair value. Read on for a straight look at whether Alphabet still looks cheap given those facts.
Top 10 Stock Picks of 10 Famous Billionaires named Alphabet near the top of its list, and big funds clearly notice. Alphabet (NASDAQ:GOOGL) ranks highly across hedge fund filings, with a large number of institutional investors still allocating to the name. That concentration matters because it shapes sentiment and liquidity for the shares.
Number of Hedge Funds: 265 gives a snapshot of how crowded the trade already is, but crowding alone does not equal fair value. Chase Coleman’s Tiger Global lists Alphabet as its biggest holding, and that tells you active managers see durable growth, not just a momentum trade. Big holders tend to lean into companies that show scalable monetization paths.
What once looked like an existential risk — AI eating search and ad revenue — instead amplified Google’s core strengths. Q1 results told the same story: search engagement leapt roughly 19 percent, not fell, and YouTube ad revenue grew double digits, driven by smarter ad targeting. Those moves are proof points that AI can lift relevance and pricing power for advertising platforms.
Google Cloud is the other headline, and its pace is striking. Revenue climbed about 63 percent in the quarter while operating margins widened, implying the business is moving into higher-margin enterprise workloads. A reported Cloud backlog around $460 billion gives a rare line of sight into future revenue, a level of visibility investors crave.
Alphabet’s hardware and infrastructure work also matters. The firm’s custom TPU chips are turning from an R&D edge into a cost and performance advantage for AI compute. That vertical integration can lower unit economics for training and inference, which translates into either better margins or faster product iteration, or both.
On the user front, Gemini is scaling fast. The standalone app reportedly sees roughly 750 million monthly active users while its models fuel over 2 billion monthly interactions across Search and AI Mode. Paid and enterprise adoption is climbing too, with something north of 8 million seats reported in enterprise contracts, showing traction beyond consumer novelty.
From a valuation lens, the stock is not a bargain in the classic sense but it is priced for strong growth. Forward P/E sits in the mid-to-high 20s, near the high 20s range, while consensus earnings growth sits roughly in the high-20s to low-30s annually. That mix of robust growth and a premium multiple leaves little room for disappointment but also supports a higher multiple if growth sustains.
Not every investor is convinced the shares are cheap. L1 Capital International Fund noted they trimmed Alphabet among other holdings after a run-up. Their comment shows a cautious approach when price reaches the top of a manager’s fair value estimate, and it underlines that even fast-growing giants can become expensive in short order.
Portfolio adjustments during the March 2026 quarter were relatively modest, but deliberate. We trimmed investments in AerCap, Alphabet Inc. (NASDAQ:GOOGL), HCA Healthcare and Weir Group at prices around the top end of our assessed fair value range, with all of these businesses benefitting from positive sentiment intra-quarter. Alphabet’s share price has more than doubled over the past 12 months. This reflects strong performance in core Search, continued momentum in Google Cloud Platform, and better-than-expected progress in AI (Gemini). Today Alphabet has a market capitalisation approaching US$4 trillion. Share prices and fair value are not always aligned, even for the world’s largest companies (Click Here to Read the Letter in Detail).
So where does that leave a potential buyer? If you believe AI-driven user engagement and enterprise cloud adoption keep delivering, Alphabet’s growth profile supports a premium multiple. If you worry about tougher ad comps, regulatory friction, or slower Cloud monetization, the current price already bakes in a lot of good outcomes. The choice depends on how much risk you assign to execution versus optimism priced into the shares.
