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Buy Alphabet Stock After Waymo Expands Robotaxi Services?

Even as the longest shutdown in government history ends, markets couldn’t shake ongoing fears that stocks are overvalued, with concerns growing that the AI trade is bubbling in particular.

Alphabet (GOOGL - Free Report)  wasn’t immune to Thursday’s broader but tech-led selloff despite recently announcing ambitious news that its wholly owned subsidiary Waymo has made significant strides as it relates to robotaxi services.

Launched in 2009 as part of Google’s Self-Driving Car unit before being reorganized into an independent company under the Alphabet umbrella, Waymo has already launched large-scale, fully driverless services in multiple U.S. cities.

Making Alphabet stock stand out is that unlike Waymo, Tesla’s (TSLA - Free Report)  robotaxi services are still in the earlier stages of autonomous driving. To that point, some of Tesla’s robotaxi rides are still being supervised by a human safety driver on top of needing to scale out its coverage.

 

Waymo Launches Express Way Services

Overshadowed due to this week’s selloff is that Waymo announced its robotaxis are now offering freeway rides in three major U.S. cities — San Francisco, Los Angeles, and Phoenix — and expanded service to San Jose, including curbside pickups at San Jose Mineta International Airport.

This marks the first time in the U.S. that passengers can book fully driverless trips on highways, with Waymo moving further ahead than Tesla regarding robotaxi ambitions.   

 

How Big will the Robotaxi Market be?

Focusing on potentially lucrative partnerships with companies like Uber (UBER - Free Report) , Lyft (LYFT - Free Report) , and Avis (CAR - Free Report) , Waymo has delivered millions of paid rides.

While exact revenue figures haven’t been publicly disclosed, some analysts estimate Waymo is already generating hundreds of millions of dollars annually and expect this to increase to around $2-$5 billion as it expands to more cities and highways.

Waymo’s revenue is included in Alphabet’s Other Bets segment, which collectively generated $1.5 billion in 2024, up from $1 billion in 2023. Needless to say, Waymo is emerging as an impressive growth catalyst for a tech giant that is now bringing in nearly $400 billion in consolidated annual revenue.

Furthermore, leading up to 2030 and beyond, the robotaxi market is projected to be valued at well over $100 billion, having a CAGR of 40% or higher, with Waymo being the first real mover in the industry.   

Notably, Waymo’s Co-CEO, Tekedra Mawakana has set the company’s goal at a million trips per week by 2026, after providing over 250,000 paid trips per week last year.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Conclusion & Final Thoughts

From a long-term perspective, Waymo is yet another reason why Alphabet stock has remained one of the most lucrative investments in tech. Sitting on stellar gains of nearly +50% year to date, GOOGL currently lands a Zacks Rank #3 (Hold).  

That said, EPS revisions for fiscal 2025 and FY26 have remained higher over the last 60 days, which could make Alphabet stock more appealing on the dip and lead to a buy rating.  

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