In times like these, it's important for investors to understand the difference between a company in trouble and a falling stock price. The 2022 bear market took down a wide swath of Wall Street favorites, ravaging good and bad stocks alike. However, once the market recovers -- and it will -- strong companies with even better prospects will rebound, enriching investors along the way.

Alphabet (GOOGL 1.89%) (GOOG 1.44%) is one of those strong companies. The company was buffeted by short-term headwinds that cratered its stock, but the evidence suggests that it will bounce back once the economic environment stabilizes.

A person looking at graphs and data on a see-though computer display.

Image source: Getty Images.

Google and YouTube: I still haven't found what I'm looking for

Make no mistake -- when it comes to internet search, there's Google and there's everyone else. It simply dominates the landscape, controlling an unrivaled 92% of the market. Many competitors have tried and failed to match Google's search acumen, but none ever gained any serious traction to take on the leader. 

Aside from search, Alphabet has another business that caters to those looking for answers. YouTube, the company's streaming-video service, also puts every other platform to shame. The service boasts more than 2.6 billion monthly active users and accounts for roughly 25% of worldwide mobile traffic. Viewed another way, YouTube is actually the second-largest global search engine. 

These businesses created a giant revenue-generating funnel that powers the rest of Alphabet's vast and growing empire.

Digital ads: You better shop around

The most obvious beneficiary of all those searches is Google's industry-leading digital-advertising business. While estimates vary, Google commands roughly 28% of global digital ad spend, according to Ebiquity Marketing. For context, the two nearest competitors, Meta Platforms and Amazon, control 15% and 4%, respectively. 

Over the years, as the market evolved, Google's share gradually declined -- but an expanding overall market helped the adtech business steadily increase its revenue. According to Research and Markets, the digital-advertising market is expected to hit $477 billion in 2022, climbing to $786 billion by 2022, which is a compound annual growth rate (CAGR) of 14%. This helps illustrate the long runway ahead for Google.

Google Cloud: I've looked at clouds from both sides now

With the ongoing digital transformation, more companies than ever before are moving data, workloads, and even systems to the cloud. This provides a large and growing opportunity for the biggest cloud computing platforms. This includes Google Cloud, which has become the third-largest cloud provider, behind just Amazon Web Services (AWS) and Microsoft Azure.

An important distinction, however, is that Google Cloud is the fastest-growing of the three, with cloud revenue that grew 48% year over year in the third quarter. Azure and AWS rose 35% and 27%, respectively. 

To the victors go the spoils, as the old saying goes, and this case is no different. The cloud computing market is expected to grow from $482 billion in 2022 to more than $1.9 trillion by 2032, according to research and consulting firm Fact.MR. This shows the enormous ongoing expansion and the vast opportunity that remains. 

Waymo: Who's gonna drive you home?

Alphabet was one of the pioneers of autonomous driving systems, giving birth to Waymo along the way. The initial excitement about self-driving cars has given way to the reality that it will still be some time before the remaining flaws are worked out of these systems.

That said, Waymo is still the industry leader by most measures and stands to reap the benefits of its early lead in the space. Estimates vary widely, but the self-driving car market is expected to grow from $25 billion in 2021 to $197 billion by 2030, a CAGR of 26%, according to Strategic Market Research. 

While it may be years or even decades before we understand the full extent of this opportunity, Waymo is well-positioned to take its place among the self-driving elite.

Alphabet financials: Show me the money

It's well documented that marketing budgets are among the first areas to be cut in times of economic turmoil, and that was evident in Alphabet's recent results. In the third quarter, revenue grew just 11% year over year (in constant currency), a far cry from its 39% growth in the prior-year quarter. 

But it's important to remember that this corporate belt-tightening is temporary and will give way to a resumption of spending once the economy regains its footing. Alphabet's continuing leadership in search, streaming, and digital advertising suggest the declines in its stock price are driven primarily by macroeconomic factors, which will, in time, give way to the next bull market.

Finally, Alphabet stock is currently selling for just 19 times earnings, near its lowest price-to-earnings ratio in almost a decade. Its P/E valuation is also cheaper than both the S&P 500 and the Nasdaq Composite, which clock in at 20 and 25, respectively. 

Given its industry leadership, large market opportunities, and bargain-basement sticker price, Alphabet is a screaming buy right now.