News
Philippe Laffont's Coatue Adds Alphabet to AI Stock Top Picks
Source: nasdaq.com
Published on October 29, 2025
Core topic: Alphabet AI stocks
Keywords: Philippe Laffont, Coatue Management, Alphabet, AI stocks, Google Gemini, Google Search, ChatGPT, AI chatbots, Google Cloud, antitrust case, stock valuation, tech giant, AI investments, AI era, investment opportunity, AI landscape, AI competition
Main keywords: Philippe Laffont, Coatue Management, Alphabet stocks, AI investments, Google Search, Google Gemini, AI chatbots, ChatGPT, Google Cloud, antitrust ruling, stock valuation, tech giant, AI landscape, investment opportunity, AI era
Supporting n-grams: Philippe Laffont, Coatue Management, AI stock, Alphabet shares, Google Gemini, AI chatbots, Google Search revenue, AI investments, Google Cloud, antitrust case, ChatGPT competition, AI era
Alphabet Joins Coatue’s Top AI Stock Picks
Philippe Laffont’s Coatue Management has added Alphabet to its elite list of AI stock picks, marking a significant shift in the firm’s perspective on the tech giant. Initially cautious about the threat posed by generative AI models, Coatue now views Alphabet as a resilient player in the AI landscape, driven by its recent performance and strategic AI investments.
Alphabet’s inclusion in Coatue’s “Fantastic 40”—a curated selection of top investment opportunities—comes after the company demonstrated strong second-quarter results. Despite earlier concerns about AI chatbots like ChatGPT eroding Google’s search market share, Google Search revenue grew by 12% year over year, indicating the company’s ability to adapt and compete in the AI era.
The Shift in Coatue’s Perspective
Coatue’s initial hesitation was rooted in data suggesting that AI chatbots could disrupt Google’s core business. Users who subscribed to ChatGPT showed a decline in Google page views, fueling concerns about the tech giant’s vulnerability. However, recent developments have led Coatue to reevaluate its position. A favorable antitrust ruling removed a significant legal obstacle for Alphabet, while the company’s AI initiatives, particularly Google Gemini, have shown promising growth.
"Google’s distribution network is a game-changer," noted Chamath Palihapitiya, a prominent hedge fund manager. "By integrating Gemini into its existing products, Google is leveraging its massive user base to stay competitive in the AI race." This strategic move has reinforced Coatue’s confidence in Alphabet’s ability to thrive alongside emerging AI technologies.
Alphabet’s AI Strategy
While Google Search remains Alphabet’s primary revenue source, the company is increasingly benefiting from its AI investments in Google Cloud. The cloud computing segment has seen rapid growth, with year-over-year expansion exceeding 30% and improving operating margins. Alphabet’s valuation also remains attractive, with a forward price-to-earnings ratio below 26, suggesting potential for stock price appreciation.
"Alphabet’s AI strategy is multifaceted," said an industry analyst. "The company is not only defending its core search business but also expanding its AI capabilities through Google Cloud and innovative products like Gemini. This dual approach positions Alphabet as a strong long-term investment."
Investment Considerations
Despite Coatue’s optimism, some analysts remain cautious about investing in Alphabet. The Motley Fool’s Stock Advisor team, for instance, did not include Alphabet in its top 10 stock picks, citing other companies with potentially higher returns. However, Alphabet’s inclusion in Coatue’s “Fantastic 40” underscores its long-term potential.
Investors are advised to weigh these perspectives and conduct thorough research before making investment decisions. Key factors to consider include Alphabet’s AI strategy, financial performance, and valuation relative to other opportunities in the market. Ultimately, the decision to invest in Alphabet will depend on individual risk tolerance and investment goals.
The Future of Alphabet in the AI Era
Alphabet’s response to the AI landscape highlights the dynamic nature of the industry. While the threat from AI models remains real, the company’s extensive reach and resources provide a competitive advantage. As Google continues to innovate and adapt, its ability to thrive in the AI era will be a key factor for investors to watch.