Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 5.21%, and its shares gained 49.86% of their value over the last 52 weeks. On October 03, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $246.45 per share, with a market capitalization of $2.975 trillion.

Middle Coast Investing stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:

“We invested in Alphabet Inc. (NASDAQ:GOOG) earlier this year when the market viewed it as an AI loser, which seemed unlikely to me. Gemini has only grown in prominence since then. The other part of this thesis was that a government break up of Alphabet would be good for shareholders. The market disagrees; but after the recent anti-trust ruling did not force Google to sell its Chrome unit, the stock has gone up. Waymo, Alphabet’s autonomous driving unit, is also an AI-powered company that is deploying fleets in more and more cities. Not GenAI, exactly, but in the ballpark.”

Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 178 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 164 in the previous quarter. In the second quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue of $96.4 billion, representing an increase of 14% compared to Q2 2024. 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.