AI Integration Strengthens Alphabet’s (GOOG) Core Business

AI Integration Strengthens Alphabet’s (GOOG) Core Business Soumya Eswaran Tue, August 4, 2026 at 6:29 PM GMT+2 3 min read GOOG Greenskeeper Asset Management, an independent firm that specializes in disciplined value investing, recently released its Q2 2026 scorecard. A copy is available to download here .   After a slow start to the year, the Fund gained 10.

9% in the quarter, lifting its year-to-date return to 1. 9%. The rebound came as markets showed signs of rotating away from momentum stocks and toward companies supported by reasonable valuations.

Please review the Fund's top five holdings to gain insights into their key selections for 2026. In its second-quarter 2026 investor letter, Greenskeeper Asset Management highlighted Alphabet Inc. (NASDAQ: GOOG ) as a leading performance contributor.

Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence. On August 03, 2026, Alphabet Inc.

(NASDAQ:GOOG) closed at $372. 47 per share, reflecting a market capitalization of $4. 56 trillion.

Alphabet Inc. (NASDAQ:GOOG) posted a one-month return of 2. 43%, while its shares gained 90.

70% over the past 52 weeks. Greenskeeper Asset Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor letter: " Alphabet Inc.

  (NASDAQ:GOOG), +23. 2%, was our third-best performer in the quarter. After more than two years of market concern that AI chatbots would cannibalize Google's core search business, recent results are proving those fears unfounded.

Boosted by AI Overviews and AI mode, Search revenue grew nearly 20% in the most recent quarter. This performance was driven primarily by higher paid-click volume, alongside a modest rise in revenue per click— demonstrating that AI integration is enhancing, rather than displacing, the platform's core value proposition. Alphabet's Cloud division is showing even stronger momentum: its backlog has nearly doubled, while operating margins expanded to 33%, highlighting both robust demand and expanding operating leverage.

Meanwhile, management continues to invest heavily in compute infrastructure. With market-leading positions across search, cloud, digital advertising, and AI, we believe Alphabet remains exceptionally well-positioned to earn strong returns on its capex and compound intrinsic value over time. " 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 .

Story Continues In another article , we covered Alphabet Inc.  (NASDAQ:GOOG) and shared Jensen Investment Managements' insight 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.

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