Wedgewood Partners, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, Wedgewood Composite’s net return was -6.3% compared to the Standard & Poor’s -4.3%, the Russell 1000 Growth Index’s -10.0% and the Russell 1000 Value Index’s 2.1% return for the same period. In addition, you can check the fund’s best 5 holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Wedgewood Partners 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 -6.48%, and its shares lost 0.88% of their value over the last 52 weeks. On April 16, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $155.50 per share with a market capitalization of $1.881 trillion.

Wedgewood Partners stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

"Alphabet Inc. (NASDAQ:GOOG) also detracted from performance during the quarter, despite of +13% growth in its core search business and over +20% growth in segment income for Google Services. The Company's search results are beginning to beneit from the addition of "GenAI" (generative arti icial intelligence) responses being added, which monetize at a nearly similar rate as traditional search results do. Alphabet's Google subsidiary serves billions of users per day, so it is no mean feat to be able to offer GenAI to users free of charge. Google has long been at the forefront of AI hardware and software R&D, irst rolling out its Tensor Processing Units (TPU) to run machine-learning operations across massive datasets almost a decade ago. The Company should be able to continue to drive growth thanks to these large long-term investments in AI and other technical software and infrastructure."

A laptop and phone open to Google's services in an everyday setting.

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 2024, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue growth of 14% compared to 2023, reaching $350 billion. For the fourth quarter, the revenue was $96.5 billion, reflecting a 12% increase in both reported and 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.

We covered Alphabet Inc. (NASDAQ:GOOG) in another article, where we shared Middle Coast Investing's views on the company. In addition, please check out our hedge fund investor letters Q1 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.