Resilience in Its Core Business Powers Alphabet’s (GOOG) Performance

Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Durable Advantage Fund”. A copy of the letter can be downloaded here. The Fund returned 2.6% in the fourth quarter, which mirrored the S&P 500 Index’s 2.7% return. The Fund returned 16.6% in 2025, compared to 17.9% for the Index and 16.1% gain for the Peer Group, Morningstar Large Growth Category average. Moving to 2026, in an environment dominated by geopolitics, changing regulatory trends, and artificial intelligence, the Fund focuses on investing in high-quality, large-cap companies with solid competitive advantages, proven track record, and consistent shareholder returns. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Baron Durable Advantage Fund highlighted stocks like 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, and is a significant contributor to the fund’s performance in the quarter. On February 10, 2026, Alphabet Inc. (NASDAQ:GOOG) stock closed at $318.63 per share with a market capitalization of $3.85 trillion. One-month return of Alphabet Inc. (NASDAQ:GOOG) was -4.63%, and its shares gained 72.98% of their value over the last 52 weeks.

Baron Durable Advantage Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2025 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google, the world’s largest search and online advertising company. Shares rose 28.9% (and 65.5% for the year) on strength in the company’s core businesses, as well as accelerating growth in Google Cloud and Other Bets. In the third quarter, revenues grew 15% in constant currency while EPS grew 35% year-on-year. Despite strong growth of AI competitors such as ChatGPT, both Search and YouTube delivered double-digit revenue growth year-on-year. Additionally, Google Search paid clicks increased compared to the prior year. Google also released the latest version of its AI assistant, Gemini, which currently sits at the top of most AI leaderboards, suggesting the company’s frontier AI research capabilities remain world class. Meanwhile, Cloud revenue growth also accelerated to 34% year-over-year, driven by demand for AI cloud services, with the number of large deals over $1 billion, signed through the third quarter of 2025, greater than the prior two years combined, and the number of monthly AI tokens processed in September up 20 times year-on-year. We believe there is further runway for cloud acceleration, given a significant increase in backlog and a large deal announced with leading AI startup Anthropic. Long term, we believe AI innovation should lead to further broad-based opportunities such as autonomous driving (through Waymo), agentic commerce (through the recent partnerships with Shopify and others on Universal Commerce Protocol) and a continued healthy cloud infrastructure business in GCP.”