In 2021, the air got taken out of the small-cap, software, meme stock, and electric vehicle bubbles. In 2022, that pain has finally come to mega-cap technology giants like Apple and Amazon. All five of what are considered the big tech companies are losing to the S&P 500 in 2022, with some like Meta Platforms down 65% this year. Investors are worried about a potential slowdown in the cloud and digital advertising industries, which these five companies dominate.

GOOG Total Return Level Chart

GOOG Total Return Level data by YCharts

But these short-term problems -- if they ever materialize -- are only bumps in the road for the long-term growth of these dominant companies. Here's why I think Alphabet (GOOG 0.76%) (GOOGL 0.79%), one of the big tech stocks, can be a great buy for your portfolio in 2023. 

Alphabet's steady earnings from Google Search

Alphabet is the parent company of Google, YouTube, Android, and the Google Cloud Platform (GCP). It has tons of different businesses, but the most important by far is still its original product, Google Search. The tool has a 92% market share of the search engine market (excluding China), a share it has retained for many years. With minimal competition, Google has been able to reach previously unthinkable heights through its lucrative search advertising marketplace.

Last quarter, Google Search revenue hit $39.5 billion, up 4.2% year over year, even while facing major foreign currency headwinds. The segment is the core driver of Alphabet's earnings at the moment, making up the majority of its $78.6 billion in annual operating income. As more people start using the internet this decade, Google Search should continue to grow as well.

But that's not all Alphabet has up its sleeve to drive growth.

Explosive growth from YouTube and Cloud

Outside of Google's consumer products, there are two segments that can become much larger businesses over the next five years: YouTube and Google Cloud Platform (GCP).

YouTube is one of the most popular platforms worldwide, with over 2 billion active users. The video platform hit $7.1 billion in advertising revenue last quarter, which was actually down from $7.2 billion a year ago but up significantly from $3.8 billion in 2019.

Teenagers love YouTube, with 95% using it on a regular basis. It also has a strong presence in the internet-connected TV market, with an estimated 50% market share of ad-supported streaming time.

As teenagers grow older, becoming more attractive to advertisers, and more TV watching switches to internet streaming, YouTube should be able to steadily grow its viewing hours over the next decade. This, in turn, should drive growth in advertising revenue.

GCP is one of the leading cloud infrastructure providers, along with Amazon Web Services and Microsoft's Azure. GCP has around 10% of the cloud market, which translated to $6.9 billion in revenue last quarter, up 38% year over year. The segment is operating at a loss right now, but if its competitors like AWS or Azure are any indication, GCP should reach 20% profit margins as it matures.

The cloud market is expected to hit $1.5 trillion in spending by 2030. If GCP retains its market share and reaches an operating margin of 20%, that will equate to $30 billion in annual operating income.

Alphabet stock is the cheapest it has been in years

The best part about Alphabet's stock today is not its strength in Search or the growth of YouTube and GCP, but the fact the valuation is at the cheapest it has been in 10 years.

Right now, Alphabet's price-to-free cash flow ratio (P/FCF) is 19, which is slightly below the Nasdaq's average of 21. What's even more enticing is that Alphabet's free cash flow is getting a short-term headwind due to all the capital expenditures ($30 billion over the last 12 months) it is deploying to build out things like servers for GCP. As Alphabet realizes a return on these capital investments and continues to mature over this decade, free cash flow should start to look even healthier.

GOOG Price to Free Cash Flow Chart

GOOG Price to Free Cash Flow data by YCharts

At this cheap valuation, management has started to aggressively repurchase its own shares, which will benefit long-term shareholders by reducing shares outstanding. Over the last three years, shares outstanding at Alphabet are down 6%. 

Add up strong growth, a cheap valuation, and returning cash to shareholders, and I think now is a perfect time to scoop up some shares of Alphabet for your portfolio.