We recently published a list of the 10 Best Machine Learning Stocks to Buy Now. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other machine-learning stocks.

Grand View Research reported that the global machine-learning market was valued at $36.73 billion in 2022. It’s now expected to grow at a 34.8% CAGR from 2023 to 2030. Machine learning helps machines and systems learn from experience instead of through explicit programming. It uses algorithms to improve and analyze vast amounts of complex data to make informed decisions. Machine learning is quickly progressing as AI is rapidly expanding and transforming how businesses and individuals operate. These technological advancements are revolutionizing consumer experiences, and enabling convenient creation of digital services, products, and optimized supply chains. With this, startups can focus on specific solutions while larger companies can deliver comprehensive AI platforms.

On April 10, Amazon CEO Andy Jassy joined CNBC’s ‘Squawk Box’ to discuss the cost of AI and what has to happen to bring it down. Jassy emphasized that the growth in data center demand is now so significant that there is no foreseen attenuation here, even with ongoing macroeconomic uncertainties under tariffs. While there’s a general belief that the emergence of DeepSeek could now reduce the need for extensive data centers, processing power, and energy consumption previously forecasted at different tech companies, Jassy thinks that DeepSeek’s introduction did not disrupt any of this. Despite cost reductions that occurred have already over time, AI deployment still requires significant investment. He thinks that the current AI operations are expensive due to chip costs and other factors, but big techs, including his own company, would welcome any reductions in AI costs for customers moving forward.

Jassy underscored the demand for data centers despite tariff impacts and reflected optimism regarding lowering costs, which would potentially drive innovation and expanded use of AI across industries. AI is still limited and requires substantial human oversight as of now but it has massive potential across various sectors.

Our Methodology

We sifted through ETFs and financial media reports to compile a list of the top ML stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A user's hands typing a search query into a Google Search box, emphasizing the company's search capabilities.

Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL) is a tech company that is currently leading in AI research and uses machine learning across its search engine, cloud services, and other offerings. It operates through three segments under the name of Google Services, Google Cloud, and Other Bets segments. The Google Cloud segment offers AI infrastructure, Vertex AI platform, cybersecurity, data and analytics, and other related services.

Roth MKM recently reiterated a Buy rating on the company with a $220 price target on March 19. This sentiment was fueled by the company’s $32 billion Wiz acquisition. This is the largest acquisition in the company’s history. With this, Alphabet Inc. (NASDAQ:GOOGL) can offer improved cloud security and threat detection data across cloud environments. The company is also positioned for long-term AI growth due to its significant infrastructure. This includes data centers, GPUs, and TPUs.

The company’s advanced AI-powered features like AI Overviews in Search are monetized at the same rate as traditional search. For AI and cloud growth, the company is planning a $75 billion CapEx investment in 2025. This will particularly be focused on data centers and servers. Notably, the company’s Cloud business alone grew by 30% year-over-year in Q4 2024. The combined annual revenue from Cloud and Youtube exceeded $110 billion.

Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”

Overall, GOOGL ranks 4th on our list of the best machine learning stocks to buy now. While we acknowledge the growth potential of GOOGL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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