Alphabet is the top holding of this five-star fund that is also finding 240% gains in the ‘unsexy' side of the AI buildout

The $124 million Chase Growth Fund has outperformed the S&P 500 over 1, 3, 5 and 10 years, including a 53% one-year gain versus 28% for the index. The article highlights Alphabet as the fund’s top holding and argues the fund’s all-cap mandate provides agility in the AI buildout, including opportunities in less obvious parts of the theme. This is constructive for AI-linked equities and growth-fund positioning, but the piece is primarily commentary rather than a new market-moving event.

Analysis

The key signal here is not simply that a growth fund owns GOOGL, but that capital is still being rewarded for exposure to the picks-and-shovels of AI rather than the most crowded hyperscaler basket. That matters because the next leg of AI monetization is likely to come from cost-reduction and workflow integration rather than a straight-line capex beta trade, which should favor companies with distribution, data, and monetization optionality over pure infrastructure names. In that setup, GOOGL remains one of the few megacaps where AI can expand both defensive search economics and cloud margin leverage, giving it a better risk/reward than the market’s narrow “AI winners” trade.

The second-order winner is sentiment itself: a high-profile fund leaning into an all-cap mandate can pull incremental flows into mid-cap and smaller-cap software/AI-adjacent names as investors hunt for less crowded exposure. That creates a temporary valuation tailwind for the broader AI ecosystem, but it also raises the odds of performance chasing in names with no near-term earnings inflection. If the market starts rewarding “unsexy AI buildout” more broadly, expect dispersion to increase sharply between companies with genuine operating leverage and those merely wearing the AI label.

The main risk is that this becomes a crowded quality-growth trade under a different name. If long-duration yields back up or AI capex spend shows signs of plateauing over the next 1-3 months, the market could quickly rotate away from all-cap growth funds and back into hard balance-sheet cash generators. For GOOGL specifically, the concern is not product relevance but multiple compression if investors decide AI is finally fully priced into the franchise; that would hit before fundamentals roll over.

The contrarian view is that the market may be underestimating how much of AI value accrues outside the obvious infrastructure winners. If model deployment shifts spending toward software integration, search, productivity, and workflow layers, then the current obsession with semis and hyperscaler capex may be too narrow. In that scenario, fund managers with flexibility to own the full stack—not just the headline AI names—should outperform over the next 6-12 months.

Key Decisions for Investors

• Add/maintain long GOOGL on 3-6 month horizon; use pullbacks tied to AI-capex skepticism as entries. Risk/reward is favorable because the stock has multiple monetization paths, while downside is capped by cash flow durability and balance-sheet strength.
• Pair trade: long GOOGL / short a basket of the most crowded AI infrastructure beneficiaries on any 1-3 month momentum extension. This expresses the view that AI value migration will broaden from capex to application monetization and reduce single-factor dependence.
• Initiate a small basket long of under-owned AI-adjacent software names with real revenue leverage over 6-12 months; size modestly because valuation dispersion can reverse fast if yields rise or AI spend decelerates.
• If broad growth breadth deteriorates over the next 2-4 weeks, trim high-multiple AI exposure and rotate into cash-generative megacaps. The trade-off is sacrificing upside capture for lower drawdown risk if the market re-prices duration.