Alphabet (GOOG) Gained on Strong Cloud Growth and Easing AI Search Concerns

Alphabet (GOOG) Gained on Strong Cloud Growth and Easing AI Search Concerns Ricardo Pillai Mon, July 27, 2026 at 2:06 PM GMT+2 3 min read GOOG ^GSPC GOOG Jensen Investment Management , an asset management company based in the US, released its second-quarter 2026 investor letter for the "Jensen Quality Growth Equity Strategy". A copy of the letter is available to download here . The fund seeks long-term growth by investing in high-quality companies with durable competitive advantages.

It returned 10. 94% net of fees in Q2 2026, trailing the 15. 20% return for the S&P 500 Index.

US equities posted their strongest quarter in nearly six years as easing Iran-related tensions, improving financial conditions, resilient consumer spending, and continued AI infrastructure investment lifted markets. AI and memory-related semiconductor stocks led the rally, while lower-quality and momentum stocks outperformed the quality factors central to Jensen's strategy. Quarterly performance benefited from favorable stock selection in Communication Services and no exposure to Energy and Utilities, while selection in Industrials and Information Technology hurt relative returns.

The Portfolio remains balanced across quality compounders, AI beneficiaries, and defensive businesses. In addition, please check the Fund's top five holdings to know its best picks in 2026. In its second-quarter 2026 investor letter, Jensen Quality Growth Equity Strategy highlighted Alphabet Inc.

(NASDAQ: GOOG ) as a material performance contributor. Alphabet Inc. (NASDAQ:GOOG) is a US-based multinational technology company that offers various products and platforms.

On July 24, 2026, Alphabet Inc. (NASDAQ:GOOG) closed at $319. 09 per share.

One-month return of Alphabet Inc. (NASDAQ:GOOG) was -4. 89% and its shares gained 64.

03% over the past 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of about $3.

89 trillion with a 52-week trading range between $188. 70 - $404. 47.

Jensen Quality Growth Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor letter: "Alphabet Inc. (NASDAQ:GOOG) produced strong quarterly results, reporting strong revenue, earnings, and margin growth.

Underpinning these results was strong performance in the company's cloud business, with revenue accelerating over the past several quarters, from 48% year over year (Y/Y) in Q4 to 63% Y/Y in Q1. The company also reported a significant expansion in the backlog from $240 billion as of December 31, 2025, to $462 billion as of March 31, 2026, nearly doubling. Additionally, we believe accelerating revenue growth in the search business over the past four quarters has materially eased investor concerns that generative AI might disintermediate the company's traditional search business.

" Story Continues Alphabet Inc. (NASDAQ:GOOG) ranks 7th on our list of  40 Most Popular Stocks Among Hedge Funds . According to our database, 201 hedge fund portfolios held Alphabet Inc.

(NASDAQ:GOOG) at the end of the first quarter, compared to 203 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ:GOOG)  achieved  its first-ever $400 billion annual revenue and in Q1 2026 its consolidated  revenue reached $109.

9 billion, up 22% or 19% in constant currency. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.

If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . In  another article , we covered Alphabet Inc. (NASDAQ:GOOG) and shared Giverny Capital Asset Management's insights on the company.

In addition, please check out our hedge fund investor letters Q2 2026  page for more investor letters from hedge funds and other leading investors. READ NEXT:  33 Stocks That Should Double in 3 Years  and  15 Stocks That Will Make You Rich in 10 Years . Disclosure: None.

This article is originally published at  Insider Monkey .