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Alphabet's Autonomous Car Project Spins into a New Company
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Alphabet Inc. (GOOGL - Free Report) is further strengthening its efforts toward the commercialization of its self-driving cars as evident from the creation of an altogether new self driving company.
At a press conference in San Francisco on Tuesday, the technology giant said that its self-driving car project will now no longer be a unit of Google X. Instead, it will branch out into a standalone company called Waymounder the Alphabet umbrella,.
Shares of Alphabet have been steadily treading higher on a year-to-date basis. The stock generated a return of 4.09% compared with the Zacks Internet Services industry’s gain of 3.39%.
A Few Details
Waymo does not plan to manufacture a self-driving car on its own. Rather, it will produce self-driving software for established automakers. In addition, Waymo would also use its software for ride-sharing or ride-hailing services like Uber or Lyft.
Though it is not very clear what sort of autonomous services Waymo will provide, the company said that these auto vehicles will do everyday things like run errands, commute to work, or get safely home after a night on the town.
John Krafcik, Waymo CEO, said Waymo is less interested in producing the self-driving cars themselves and more invested in developing the applications and technology that drive these cars, whether for ride-sharing or personal use.
Recent Efforts
In Aug 2016, the company appointed Airbnb top executive Shaun Stewart as a director of the project with the goal of commercializing its technology. Stewart is an experienced technology executive who has successfully headed the establishment of Airbnb’s vacation rental business. Before joining Airbnb, he served as chief executive of Jetsetter.
The appointment had also signaled the possibility of the conversion of the unit into a company, which has now turned true.
In May, Google entered into a partnership with Fiat Chrysler Automobiles N.V. (FCAU) to incorporate its self-driving technology into 100 Chrysler Pacifica minivans to be used as test vehicles. It also opened an automotive development facility in Novi, MI.
In Sep 2015, the company appointed John Krafcik as the CEO of its self-driving car division. Krafcik was the president of TrueCar, an online auto-buying service, and prior to that, served as the CEO of Hyundai U.S.
Google believed that Krafcik’s in-depth technical knowledge and valuable experience in the auto industry will take this business to newer heights.
The Journey So Far
Alphabet, then Google, took the automobile industry by storm in 2010 when it unveiled a fully operational driverless car that drove around its Silicon Valley headquarters. Following this event, both automobile and tech companies started competing against each other to develop the technology.
The driverless car project had become an integral part of Alphabet’s X labs, which was formed to test some of the most-advanced ideas of the company.
However, the road to success isn’t without obstructions. Google’s self-driving cars have met with accidents several times. In fact, in June, the search giant launched a dedicated website for the self-driving car, offering information on test drives, including regular updates on progress and incidents. The launch came after the company revealed that its self-driving cars were involved in 11 minor traffic accidents in California over the past six years and 1.7 million miles of testing.
Google will have to take necessary precautions to avoid any mishap.
Our Take
Google has been trying to bring its fully robotic car control mechanism to market by forming alliances with car manufacturers. However, the current regulatory environment doesn’t support fully automated cars, so there is some hesitation on their part.
Now, with an altogether different company, these driverless cars could eventually become an important revenue source for Alphabet.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
TiVo Corporation delivered a positive earnings surprise of 97.76%, on average, in the trailing four quarters.
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Alphabet's Autonomous Car Project Spins into a New Company
Alphabet Inc. (GOOGL - Free Report) is further strengthening its efforts toward the commercialization of its self-driving cars as evident from the creation of an altogether new self driving company.
At a press conference in San Francisco on Tuesday, the technology giant said that its self-driving car project will now no longer be a unit of Google X. Instead, it will branch out into a standalone company called Waymounder the Alphabet umbrella,.
Shares of Alphabet have been steadily treading higher on a year-to-date basis. The stock generated a return of 4.09% compared with the Zacks Internet Services industry’s gain of 3.39%.
A Few Details
Waymo does not plan to manufacture a self-driving car on its own. Rather, it will produce self-driving software for established automakers. In addition, Waymo would also use its software for ride-sharing or ride-hailing services like Uber or Lyft.
Though it is not very clear what sort of autonomous services Waymo will provide, the company said that these auto vehicles will do everyday things like run errands, commute to work, or get safely home after a night on the town.
John Krafcik, Waymo CEO, said Waymo is less interested in producing the self-driving cars themselves and more invested in developing the applications and technology that drive these cars, whether for ride-sharing or personal use.
Recent Efforts
In Aug 2016, the company appointed Airbnb top executive Shaun Stewart as a director of the project with the goal of commercializing its technology. Stewart is an experienced technology executive who has successfully headed the establishment of Airbnb’s vacation rental business. Before joining Airbnb, he served as chief executive of Jetsetter.
The appointment had also signaled the possibility of the conversion of the unit into a company, which has now turned true.
In May, Google entered into a partnership with Fiat Chrysler Automobiles N.V. (FCAU) to incorporate its self-driving technology into 100 Chrysler Pacifica minivans to be used as test vehicles. It also opened an automotive development facility in Novi, MI.
In Sep 2015, the company appointed John Krafcik as the CEO of its self-driving car division. Krafcik was the president of TrueCar, an online auto-buying service, and prior to that, served as the CEO of Hyundai U.S.
Google believed that Krafcik’s in-depth technical knowledge and valuable experience in the auto industry will take this business to newer heights.
The Journey So Far
Alphabet, then Google, took the automobile industry by storm in 2010 when it unveiled a fully operational driverless car that drove around its Silicon Valley headquarters. Following this event, both automobile and tech companies started competing against each other to develop the technology.
The driverless car project had become an integral part of Alphabet’s X labs, which was formed to test some of the most-advanced ideas of the company.
However, the road to success isn’t without obstructions. Google’s self-driving cars have met with accidents several times. In fact, in June, the search giant launched a dedicated website for the self-driving car, offering information on test drives, including regular updates on progress and incidents. The launch came after the company revealed that its self-driving cars were involved in 11 minor traffic accidents in California over the past six years and 1.7 million miles of testing.
Google will have to take necessary precautions to avoid any mishap.
Our Take
Google has been trying to bring its fully robotic car control mechanism to market by forming alliances with car manufacturers. However, the current regulatory environment doesn’t support fully automated cars, so there is some hesitation on their part.
Now, with an altogether different company, these driverless cars could eventually become an important revenue source for Alphabet.
ALPHABET INC-A Price and Consensus
ALPHABET INC-A Price and Consensus | ALPHABET INC-A Quote
Currently, Google has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Cognex Corporation (CGNX - Free Report) , TiVo Corporation and Itron, Inc. (ITRI - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
TiVo Corporation delivered a positive earnings surprise of 97.76%, on average, in the trailing four quarters.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>