Underappreciated Waymo. The hype around Tesla's robot cab has left Alphabet's project in the shade

The excitement from the long-awaited launch of Tesla robot cab overshadowed the results of another player in this sector - Waymo, owned by Alphabet, according to Bloomberg. According to analysts, whose opinion is cited by the agency, market participants have not yet put the promising project Waymo in the value of Alphabet shares as much as in the case of Tesla. Although the former already makes 250 thousand paid trips per week and is actively expanding in major U.S. cities.

Amid the hype surrounding the launch of Tesla's robot cabs, investors overlooked the success of startup Waymo, which has a similar service in operation, writes Bloomberg. The limited launch of Tesla's unmanned cabs raised the company's stock price by more than 8% the next day, June 23, even though everything hasn't gone perfectly and the services are still only available to a narrow range of users. 

While Tesla is just starting to scale its project, Alphabet-owned Waymo remains undervalued in the market, according to analysts surveyed by the agency. Waymo's robot cabs have traveled more than 71 million miles without a driver and already offer paid rides in Los Angeles, Austin, Phoenix and San Francisco. The company has alsobegan selling its services through Uber's platform in Atlanta, and plans to expand into Miami and Washington, D.C., next year. Last week, Waymo also applied for permission to test cars in New York City. Waymo was valued at more than $45 billion as of October, comparable to major auto industry players like Ford and GM, Bloomberg writes. Alphabet does not disclose Waymo's revenue, but reports that the service now handles more than 250,000 paid rides per week - five times more than a year ago.

Since the beginning of 2025, quotes of both members of the «Magnificent Seven» have fallen: shares of Tesla sagged by almost 15%, and Alphabet - by 12%. Despite the active development of Waymo, the value of Alphabet does not reflect the same excitement around robotaxis, which supports the securities of Tesla, notes Bloomberg. Investors are focused on other risks - such as antitrust claims and the company's position in AI. Alphabet's shares have traditionally been valued below other tech giants, mainly because of its high reliance on digital advertising as a major source of revenue, the agency recalls. They are now trading at a multiple of 16 to projected earnings, while Tesla's is approaching 150 - mainly due to hopes for its robotaxi service, the launch of which investors have been waiting years for.

- Waymo is becoming an increasingly attractive part of Alphabet's portfolio and could provide long-term growth for shareholders, Morgan Stanley analyst Brian Novak notes in a Bloomberg statement.

- «Investors are seriously undervaluing Waymo while overvaluing Tesla,» adds Samuel Rines, macro strategist at WisdomTree. He agrees that the market is barely factoring Waymo's value into Alphabet's valuation, despite Waymo having some of the most advanced technology, an established service and agreements with automakers. Unlike Tesla, whose high valuation is largely based on expectations of rapid adoption of robot cabs, Alphabet looks more resilient: if mass adoption of unmanned cars drags on, the company will be bailed out by other areas - search, YouTube and cloud services, emphasizes the macro strategist. «I feel more comfortable investing in Alphabet with the potential bonus of Waymo,» Rynes concluded.

- The market overvalued Tesla's unmanned cab, pricing the stock into a scenario where thousands of cars are taking passengers for $10 a ride, believes Chad Morganlander, senior portfolio manager at Washington Crossing Advisors. «There's too much noise around the launch. The stock is trading at ten times earnings. That kind of valuation is crazy,» he said on Yahoo Finance. He added that he himself is invested in Alphabet and that Waymo has already proven to work.

- «You can't even compare them,» says Andrew Choi, portfolio manager at Parnassus Investments. - One company is already up and running, rapidly growing volumes and making real money. The other is still in the development stage, and has been for years.»

- There are opposing opinions as well. For example, Sean Syverson, head of Water Tower Research, believes in Tesla's strong position in autonomous driving. He believes that Waymo has an advantage in commercialization today, but Tesla's manufacturing capabilities will be key to scaling robotaxis. Syverson is confident that the robotaxi market will be so large that there will be room for everyone.

By 2030, robotaxis could collectively generate $20 billion in revenue, Bloomberg notes, citing estimates by analyst Mandeep Singh. 

This article was AI-translated and verified by a human editor