Patient Capital cites 2027 multiples for Alphabet in Q3 letter

Patient Capital Management, a Baltimore-based firm, released its third-quarter 2026 investor letter for the Patient Opportunity Equity Strategy, highlighting Alphabet Inc. (NASDAQ: GOOGL) among its top holdings. The strategy outperformed the S&P 500 in the latest quarter, gaining 4.32% compared to the index's 2.30%, and is up 14.93% year-to-date versus the index's 12.75%. The fund attributed this resilience to a long bull run that has seen the S&P compound at 16.9% per year since March 2009, despite ongoing rate increases and investor skepticism regarding rising valuations.

In the letter, the Patient Opportunity Equity Strategy Growth Fund stated that it continues to believe Alphabet Inc. (NASDAQ: GOOGL), Meta ($720.89), and Amazon ($254.06) represent some of the most attractive opportunities in the market. The fund noted that these companies have 2027 price-to-earnings multiples between 21 and 24 times and operating income growth north of 20%. Although these stocks lagged the market this year after previously being top performers, the fund argued they possess advantages in data, capital, technology prowess, and culture that position them to be winners in an AI-dominated future.

The fund specifically observed that Google and Amazon have clearly demonstrated strong returns on capital from their AI investments, while describing Meta's recent Muse launch as a good start. The strategy is concentrated in its top ten holdings, a approach Patient Capital described as disciplined towards valuation and risk management amidst market volatility. The firm emphasized the need to understand price expectations and evaluate risks, particularly around AI durability and the supply-demand dynamics for computing capacity.

As of October 12, 2026, Alphabet Inc. (NASDAQ: GOOGL) closed at $352.72 per share with a market capitalization of $4.29 trillion. The stock returned 2.24% over the past month and is up 43.70% over the past year. The fund's letter cited a price of $348.29 for Alphabet when discussing its relative valuation and potential.

Alphabet Inc. (NASDAQ: GOOGL) ranks third on a list of the 40 most popular stocks among hedge funds. According to a database cited in the report, 275 hedge fund portfolios held the stock at the end of the second quarter, an increase from 265 in the previous quarter. While acknowledging the potential of Alphabet as an investment, the report noted that certain other AI stocks offer greater upside potential and carry less downside risk, suggesting investors look toward undervalued AI stocks that may benefit from tariff policies and onshoring trends.