Over half of Bill Ackman's hedge fund's multibillion-dollar portfolio, totaling $13.8 billion, is allocated across merely three companies.
In the dynamic world of tech giants, Alphabet Inc. continues to make waves, despite facing potential regulatory hurdles. Recently, there have been discussions about Alphabet operating an illegal monopoly, which could lead to a ruling requiring the divestiture of its Chrome browser or a ban on contracts positioning Google as the default search engine in other browsers.
Despite these challenges, Alphabet has reported impressive financial results in 2025. The tech giant's financial success can be attributed to the robust performance of Google Search and Google Cloud. Google Cloud, in particular, accounted for 43% of the total increase in Alphabet's operating earnings last quarter.
The growth in Google Cloud is noteworthy, with sales increasing 32% year over year and operating margin expanding to 22%. This strong performance has solidified Alphabet's position as one of the leading AI companies in the world.
The core advertising business of Alphabet also saw a 10% year-over-year climb last quarter, with Google Search up 12%.
Investor interest in Alphabet has been piqued, with prominent figures like Bill Ackman taking notice. Ackman, a well-known investor, bought shares of Alphabet in early 2023, following the release of OpenAI's ChatGPT. Despite trimming his position in Alphabet in 2024, Ackman added back to it over the first two quarters of 2025.
Ackman prefers the Class A shares of Alphabet, which come with voting rights. Interestingly, in the last quarters, Ackman has also acquired significant stakes in other companies such as Universal Music Group and Hilton Worldwide. Universal Music Group constituted the largest portion of his profit-oriented US stock portfolio in the last quarter.
Despite the regulatory challenges, Alphabet's shares trade for less than 21 times forward earnings expectations, the lowest among the "Magnificent Seven" stocks. This could present an attractive opportunity for investors seeking to capitalise on the tech giant's potential growth.
As Alphabet navigates these regulatory challenges, it remains to be seen how these developments will impact the company's future. However, with its strong financial performance and position as a leader in AI, Alphabet continues to be a significant player in the tech industry.
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