In line with the overall stock market, Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) stock has moved higher in recent weeks. Since hitting a new multi-year low on Nov. 3 ($83.45 per share), GOOG stock has climbed back up to around $95.14 per share.

With a company-specific developments (more below) also giving shares a boost, some may believe now that a recovery is in motion for this mega-cap tech stock. Yet while shares may not necessarily be at risk of making another big plunge, I wouldn’t assume Alphabet is en route to make a fast recovery.

Mainly, because macro issues, such as high inflation, and the economic slowdown/possible recession, are still far from entering the rearview mirror. As these headwinds continue to affect operating results in the near-term, there’s a strong chance the stock gives back its latest gains, making it best to maintain a “wait-and-see” stance.

GOOG Stock: What Drove its Recent Rally?

Throughout November, market pessimism for Alphabet stock, caused by a poorly-received earnings report in late October, morphed into renewed optimism. Mostly, due to a key piece of macro data: the latest Consumer Price Index figure, released on Nov. 10.

With the latest CPI print suggesting that inflation is perhaps cooling, the market has become more hopeful that the Federal Reserve will ease, then pivot, on interest rate hikes, in the coming year. Yet while this was the main factor behind the November GOOG stock rally, as mentioned above, there was a factor pertaining more directly to the company, that provided an additional (albeit small) lift for shares.

That would be the emergence of a shareholder activist activity within the company. On Nov. 15, activist hedge fund TCI Fund Management, which says it owns a $6 billion stake in Alphabet, sent a letter to CEO Sundar Pichai. In it the company pushed for the CEO to aggressively reduce costs by reducing headcount, and by reducing its involvement in “Other Bets” activities such as autonomous vehicle startup Waymo.

But GOOG’s recent rally has lost momentum. Another pullback may soon follow, as excitement over shareholder activism and the potential Fed pivot continue to fade.

While Not Getting Worse, Issues Will Likely Persist

Between cooling inflation, and rising chances that the Fed eases on further increases to interest rates, there’s much to suggest the current macroeconomic challenges will get worse from here. Even so, it’s questionable whether the easing of said challenges will happen quickly, or take time to occur.

Although inflation may be slowing down, as I argued in my last article on GOOG stock, it has been sticky, and could remain at elevated levels for quite some time. This could limit the Fed’s flexibility when it comes to lowering rates.

As inflation and interest rates stay high, Alphabet’s bread-and-butter advertising business will likely continue to report underwhelming results.

That’s not all. The related economic slowdown will likely keep affecting both GOOG’s advertising business, plus its cloud computing segment, as large enterprises continue to cut back on IT spending. Sure, TCI’s shareholder activism could in theory counter this, if Alphabet acquiesces to the fund’s cost-cutting demands.

However, the company’s founders still hold voting control of Alphabet. TCI doesn’t even own 1% of this trillion-dollar company’s outstanding shares. As with Starboard Value’s activist involvement with Salesforce (NYSE:CRM), TCI’s campaign may have long-shot odds of success.

Bottom Line on GOOG Stock

Trading for only 19.1 times earnings, GOOG, despite its troubles, may look tempting due to its low price. Unfortunately, a re-rating for shares is only going to arrive, when macro issues subside, and growth re-accelerates.

Until then, as the company’s revenue and earnings are further affected by high inflation and high interest rates, shares could retest lows, and remain stuck at prices under $100 per share.

There are rumors that Alphabet is gearing up to lay off 10,000 employees, but this may not be a sign that management is looking to implement TCI’s recommendations.

Other tech firms have announced similarly-sized layoffs. With Alphabet’s headcount totaling 187,000, these reductions may be only a drop in the bucket, having just a modest impact to the bottom line.

As recent developments do little to change the situation, there’s clearly still no rush to enter/add to a GOOG stock position.

On the date of publication, Louis Navellier had a long position in GOOG. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.