Alphabet's Q4 Surge Fueled by Renewed Investor Confidence, Hotchkis & Wiley Fund Reports
The Hotchkis & Wiley Global Value Fund closed out 2025 on a strong note, posting a fourth-quarter return of 3.80%, edging out the MSCI World Value Index's 3.34% gain. For the full year, the fund's 23.77% return significantly outpaced the index's 20.79%, according to its recently released investor letter. Portfolio managers credited the performance to disciplined stock selection, with a continued overweight position in international equities—a segment that delivered outsized returns in 2025 yet, in the firm's view, still trades at a compelling discount to U.S. counterparts.
"While U.S. mega-caps dominated headlines, our analysis suggests the most attractive risk-reward profiles are increasingly found abroad and in specific software ecosystems," the letter noted, highlighting the fund's strategic positioning for the coming year.
Alphabet: A Pillar of Performance
A standout contributor was Alphabet Inc. (GOOGL), the tech behemoth behind Google. The stock surged 7.33% in the month leading up to the quarter's end and has rocketed 65.79% over the past 52 weeks. Closing at $338.25 on January 29, 2026, Alphabet's market valuation now hovers around the $4.1 trillion mark. This momentum follows a landmark third quarter in 2025, where the company reported its first-ever quarterly revenue exceeding $100 billion.
"Alphabet remains a cash-generating titan with deep moats in search and cloud infrastructure," the fund's commentary stated. However, the managers struck a cautiously optimistic tone, suggesting that while Alphabet is a core holding, the explosive growth phase for pure-play artificial intelligence stocks might offer a different trajectory. "We see greater asymmetric opportunities elsewhere in the AI value chain—companies with similar upside but more insulated from regulatory and competitive headwinds."
Alphabet's popularity among institutional investors is undisputed; it ranked as the fourth most-held stock among hedge funds tracked by Insider Monkey at the end of Q3 2025, with 243 funds reporting a position.
Market Pulse: Voices from the Floor
Michael Thorne, Portfolio Manager at Sterling Capital: "Hotchkis & Wiley's call is pragmatic. Alphabet is the steady engine, but the market is now rewarding disruptors further down the AI stack. Their shift in emphasis reflects a broader search for the next wave of value creation."
David Chen, Independent Retail Investor: "It's refreshing to see a fund not just blindly chasing the Magnificent Seven. Their focus on international and niche software plays is a contrarian bet that makes sense if you believe in mean reversion."
Sarah Fitzpatrick, Editor at 'The Skeptical Investor' Newsletter: "This is classic fence-sitting. They're praising Alphabet's run but subtly downgrading its future potential? It reads like they're preparing clients for a rotation out of GOOGL. If other AI stocks are so much better, why is it still a top holding? The double-talk is exhausting."
Professor Arjun Mehta, Finance, Kellogg School of Management: "The report underscores a critical market dichotomy. Dominant incumbents like Alphabet provide stability and baseline growth, while the hunt for alpha is aggressively moving toward specialized, higher-risk AI adjacencies. This bifurcation will define portfolio strategy in 2026."
Disclosure: This analysis is based on publicly available fund documents and is for informational purposes only. It is not investment advice.