The Nasdaq-100 Technology Sector index plunged almost 40% throughout 2022 as inflation-related rises led to decreased consumer demand. But the market has begun recovering since Jan. 1, with the index up 15% year to date.

Last year's sell-off dragged down the stocks of some of the world's most valuable companies, with Alphabet (GOOG 1.06%) (GOOGL 1.08%) plunging 39% over the 12 months. The company has marginally benefited from the market's upward trend this year, with its stock up 6% since the start of 2023.

Alphabet remains home to a solid business that will likely provide substantial gains over the long term. A bull market is coming, so here are two reasons to buy Alphabet's stock while it's still down 25% year over year.

1. Alphabet has had stellar growth in the past 

The company stumbled in 2022, but its past growth suggests it won't be down forever. Over the past five years, the stock has risen 64%, and it has increased 238% over the past decade. The impressive growth has come as annual revenue has increased 106% to $282.8 billion since 2019, with operating income soaring 130% to $74.8 billion.

Alphabet's development over the years has largely been thanks to potent segments such as YouTube, Android, Fitbit, and the many services associated with Google. These platforms have catapulted the company's digital advertising business by providing access to a massive audience, attracting businesses to its ad services.

YouTube has over 2.6 billion active users, with about 52% of people who access the internet using the video platform at least once a month.

Despite this stellar growth over the years, its stock dip suggests investors remain overly cautious. As a result, Alphabet's current share price offers more value, as seen by its forward price-to-earnings (P/E) ratio in the chart below. The stock is a bargain compared to its biggest competitors.

AMZN PE Ratio (Forward) Chart

Data by YCharts.

2. A lucrative future as a market leader 

In December 2022, U.S. ad spending decreased by 12.1% -- its sixth consecutive monthly drop. Inflation drove up operating costs, which meant that many businesses had to pare down budgets, with advertising one of the first things to go. As a result, the fact that 80% of Alphabet's earnings typically stem from digital advertising didn't sit well with many investors.

But the digital advertising market still has a lot to offer once macroeconomic headwinds subside, with Alphabet's leading 27.5% market share likely to be a lucrative asset in the long term. According to Statista, worldwide digital ad spending hit $522.5 billion in 2021 and is expected to reach $835.8 billion by 2026, a 60% rise.  Alphabet is in a prime position to profit from that growth. 

Meanwhile, its steadily developing cloud business is strengthening the company by diversifying its revenue. In fiscal 2022, Google Cloud revenue increased 36.8% to $26.3 billion as the platform benefited from its 10% market share in the booming industry. The platform has gradually become a larger part of the company's business, responsible for 3.7% of its revenue in 2017, then hitting 9.3% in 2022.

According to Grand View Research, the cloud market was worth $484 billion in 2022 and is projected to expand at a compound annual rate of 14.1% through 2030. So Google Cloud's business will likely continue developing for years, especially as the company puts a more significant focus on artificial intelligence (AI). 

Alphabet shares plunged in 2022, but the sell-off has only made its stock more compelling. The company's long-term outlook suggests a bull market is coming, meaning now is a great time to buy shares in Alphabet.