Waymo Could Be Alphabet’s Breakout Catalyst

Today’s market is highly reactive to headlines, and understandably so. With major developments emerging almost weekly, it’s no surprise investors stay glued to their newswires as the S&P 500 swings in all directions. However useful this may be, the awareness part, there is also a caveat to connecting unrelated themes to one another. This is the case for a major stock in the technology sector, which might be a massive opportunity.

Alphabet Today

$168.47 -2.40 (-1.40%)

As of 05/23/2025 04:00 PM Eastern

52-Week Range

$140.53

▼

$207.05

Dividend Yield

0.50%

P/E Ratio

20.93

Price Target

$199.75

Shares of Alphabet Inc. NASDAQ: GOOGL have traded down to 83% of their 52-week high today. They are not in an outright panic or bear market but have significantly underperformed their peers in the rest of the space, especially within the Magnificent Seven stocks group. This could be the case for many reasons, though one specific reason is directly tied to the company’s news cycle.

Alphabet hasn’t been releasing much news related to artificial intelligence lately, nor equipment or services, but rather with regard to its autonomous taxi service called Waymo. Now, Waymo is absolutely making a splash in certain cities within the state of California, but the autonomous taxi name itself might be the sole reason why the markets have failed to react positively yet, giving investors a chance to exploit this fact.

Autonomous Driving Isn’t as Exciting Right Now

In any other news cycle, it might be. But today, the term autonomous driving or autonomous taxi has been tarnished by another completely unrelated company to Alphabet, Tesla Inc. NASDAQ: TSLA. It seems that, apart from being a part of the technology sector and the Magnificent Seven, these two don’t have too much in common.

Yet Tesla has recently overpromised and under-delivered on its robotaxi initiative, which sounds a lot like the autonomous taxi promise that Alphabet’s Waymo is making today. This might not seem like a legitimate reason to keep the stock down, but investors need to remember that today’s market is totally exposed to the news cycle.

That being said, there are many key differences in Waymo’s current stance that set it apart from Tesla’s delayed robotaxi initiative. For starters, the technology itself is very different from Tesla’s in the sense that Waymo’s fleet is fully autonomous and requires no human supervision, unlike Tesla’s self-driving mode, which does require supervision.

Secondly, Waymo vehicles use radar technology to allow them to fully operate in the environment around them successfully (again without supervision). While all of this might sound a bit too good to be true, the numbers speak for themselves regarding Waymo’s adoption rate.

So far in 2025, Waymo reported up to 250,000 paid rides per week. These are not the types of numbers investors would see from a startup idea only breaking ground into the market; this is a well-developed and mature service that has already seen enough acceptance and adoption to justify further expansion and growth.

How This Creates a Gap to Be Filled

Of course, there are no real ways to understand how Waymo will affect Alphabet’s gigantic business, and the bears are not only leaning on its resemblance to Tesla robotaxis as a thesis but also on the fact that Google Search has lost ground to ChatGPT over the past couple of months.

There’s one gap in this logic, however, since artificial intelligence models like ChatGPT ultimately source most of their answers and information from a database provided by Google, which is part of Alphabet’s umbrella. Therefore, it is reasonable to expect some sort of collaboration in this regard.

Now, when investors come back to Waymo, the growth and acceptance could also make it a reasonable partnership candidate with a name like Uber Technologies Inc. NYSE: UBER, as the synergies and benefits both can have by partnering are more than obvious at this point.

In fact, it does seem that Uber and Alphabet have been in talks of seeking a combination of their services, where executives talk through the thought process of how these two disruptors can coexist in their respective markets, creating new opportunities for both.

Despite being a laggard in its space, Alphabet’s future developments in Waymo and other partnerships justified enough future momentum for some institutions to come knocking on its door. As of May 2025, those from UBS Asset Management decided to build up a stake worth up to $6.8 billion, signaling some of these investment themes and views are gaining traction among so-called “smart money.”

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