Google and big tech had a 'nightmare' 2022, but their problems won't go away soon
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Like the vast majority of public tech companies, Google and its parent company Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) had a difficult 2022, plagued by regulatory issues, a weakening global economy, rising inflation and a weak stock market.
While there is some hope that some of those issues start to subside in 2023, investment firm Monness, Crespi, Hardt believes they are likely to persist into next year, even if the company has "proved more resilient than its peers."
Analyst Brian White, who has a buy rating on Alphabet (GOOG) (GOOGL), noted that a weakening ad market and regulatory issues are likely to persist throughout the world for at least part of 2023, negatively impacting Alphabet (GOOG) (GOOGL). 
"In 2022, the combination of a weakening economy, a post-lockdown hangover in certain verticals, and the impact of Appleâs privacy initiatives, most notably App Tracking Transparency, negatively impacted the digital ad market," White wrote in a note to clients, adding that foreign exchange headwinds hit revenue growth and made year-over-year comparisons tough. Revenue growth rate for Google Advertising fell to just 3% in the third-quarter, down from 43% in the third-quarter of 2021.
"For 2023, we expect a further weakening of the economy to weigh on digital ad spending; however, the [year-over-year] comparisons will become easier as the year unfolds," White added.
The analyst also noted that regulatory issues are likely to keep hitting the tech giant, both at home and abroad.
In the U.S., White said the big tech companies are on the "hot seat" as various pieces of legislation are aimed at them and there has been a steady stream of "confrontational" congressional hearings. Despite all of that, there has not been much in the way of finalized legislation to further regulate these companies.
Conversely, the European Union has passed both the Digital Markets Act and Digital Services Act, which could severely impact tech companies financially if they run afoul of them.
Even with all of that, White noted Alphabet (GOOG) (GOOGL) had some bright spots this year, including Google Cloud, foresight to slow down spending going into a challenging economy, a major beneficiary of the long-term digital advertising trend and the continued push to the cloud.
Investment firm Baird recently picked Google (GOOG) (GOOGL) among the firm's top stock picks for the new year.