SGA Raised Its Bet on Alphabet (GOOG) as AI Demand Accelerates

SGA Raised Its Bet on Alphabet (GOOG) as AI Demand Accelerates Soumya Eswaran Mon, August 24, 2026 at 3:37 PM GMT+2 3 min read GOOG Sustainable Growth Advisers (SGA), an investment management company, released its second-quarter 2026 investor letter for its "Global Growth Strategy. " The letter can be downloaded here . The SGA Global Growth Portfolio returned 7.

4% gross and 7. 2% net, compared with 14. 9% for the MSCI ACWI and 19.

8% for the MSCI ACWI Growth Index. Momentum leadership and enthusiasm around AI infrastructure drove markets, with semiconductor, memory, and hardware stocks accounting for much of the gain. Although the portfolio owned AI beneficiaries, broader holdings lagged despite fundamentals, as median revenue and EPS growth reached 12% and 14% and more than 60% of the holdings beat expectations.

SGA believes valuation compression reflects sentiment rather than weaker business quality, leaving the portfolio near its widest discount to the market since inception. The firm continues to favor durable compounders and expects 16% revenue growth and 20% earnings growth over three years. Also, please check the Fund's top five holdings to see its best picks for 2026.

In its second-quarter 2026 investor letter, SGA Global Growth Strategy 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 21, 2026, Alphabet Inc. (NASDAQ:GOOG) closed at $341.

75 per share, reflecting a market capitalization of $4. 2 trillion. Alphabet Inc.

(NASDAQ:GOOG) posted a one-month return of 4. 65%, while its shares gained 63. 39% over the past 52 weeks.

SGA Global Growth Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor letter: " Alphabet Inc.  (NASDAQ:GOOG) was a contributor to performance during the quarter supported by the continued narrative that the company is a well-positioned beneficiary of the AI investment cycle.

Its full‑stack exposure spans infrastructure, foundational models, developer tools, and scaled consumer applications, providing broad participation in AI adoption. The stock benefited from the company's Q1 report which highlighted robust ongoing demand for the company's AI compute resources. We continue to view Alphabet as a high-quality, long-term compounder.

Its leading global platforms, supported by strong network effects, direct user relationships, and scaled infrastructure, underpin durable pricing power and highly recurring revenue streams. The company remains well-positioned to benefit from sustained growth drivers, including the ongoing shift toward digital advertising and cloud computing, while its continued investment in AI and innovation supports its ability to reinforce its competitive position over time. We raised the position target, maintaining an above-average weight.

" 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 discussed Alphabet Inc. (NASDAQ:GOOG) and noted that investors sentiment has calmed with Scott Devitt's Buy rating signaling reduced concerns on Search.

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 .