Massive themes like crypto and AI have driven large swathes of the market higher in recent years, and now, the newest mega-theme taking the market by storm is self-driving cars and autonomous vehicles. Whether it be Alphabet’s (GOOGL) Waymo approach or Tesla’s (TSLA) Elon Musk-led largesse, investors are realizing that the future of autonomous, driverless driving is now here.
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TSLA’s highly anticipated robotaxi launch event captured investors’ imaginations and sent the stock surging higher earlier this month. However, there’s an even more appealing self-driving stock that’s hiding in plain sight, which has made considerably more progress in this area.
Understandably, Alphabet hasn’t yet generated the same type of self-driving buzz that more immediately recognizable self-driving plays like Tesla and Uber (UBER) have. After all, Waymo is just one part of Alphabet’s business, and a small one at that, when considering the massive size and scale of its larger businesses like search, Google Cloud, and YouTube. However, Waymo is emerging as a force to be reckoned with and could soon become a significant driver of growth for the stock.
I’m Bullish on Alphabet based on the massive and underappreciated progress it has quietly made in self-driving vehicles through its Waymo unit, combined with its modest valuation, especially compared to other self-driving stocks. Additionally, Wall Street analysts rate the stock a Strong Buy, which further supports the bullish thesis.
Waymo is Underappreciated
While Tesla received significant buzz for its Robotaxi launch, Alphabet has already made significantly more headway in this area, albeit quietly.
Tesla’s recent robotaxi event generated considerable public interest, though the demonstration itself was relatively limited in scope. According to Reuters, a small fleet of Tesla vehicles transported select guests—primarily influencers and Tesla supporters—within a geofenced area in Austin’s South Congress neighborhood. While this represents a step forward for Tesla’s autonomous vehicle ambitions, the event’s controlled environment makes it difficult to characterize as a major breakthrough in the broader rollout of self-driving technology.
In contrast, Alphabet’s Waymo has already established a strong operational presence in the autonomous ride-hailing space. Waymo vehicles are now a familiar sight in several major U.S. cities, where they routinely provide paid rides to customers without requiring a human driver, often with little media attention.
In its most recent update, Alphabet reported that Waymo is now completing over 250,000 paid autonomous rides per week across the U.S. The company has partnered with Uber (UBER) to help meet growing demand and currently operates in key markets, including Los Angeles, Phoenix, San Francisco, and Austin.
Additionally, Waymo is reportedly expanding into other major metropolitan areas, including Atlanta, Miami, and Washington, D.C. By establishing early operations in these cities, Waymo has secured a strong competitive position, with significant room for continued growth as the market for autonomous mobility evolves.
Cheaper than the Competition
While Waymo is making incredible progress behind the scenes, shares of Alphabet are incredibly cheap.
Alphabet stock trades for just 18.6x 2025 earnings estimates, considerably cheaper than the broader market. For comparison, the S&P 500 (SPX) is valued at approximately 23x forward earnings estimates, so Alphabet offers investors a notable discount to the index here.
Not only is Alphabet cheaper than the S&P 500, it’s also significantly more affordable than the other major self-driving stocks. For example, Tesla trades at an incredible 170x 2025 earnings estimates, nearly ten times Alphabet’s valuation, which beggars belief. Meanwhile, Uber trades for about 33x 2025 earnings estimates, which is a much more reasonable multiple, but still a significant premium to Alphabet.
Alphabet is by far the most affordable of these major self-driving stocks, offering investors seeking to gain exposure to this compelling theme significant value.
Is Alphabet (GOOGL) a Buy, Sell, or Hold?
Turning to Wall Street, GOOGL earns a Strong Buy consensus rating based on 27 Buys, nine Holds, and zero Sell ratings assigned in the past three months. The average GOOGL stock price target of $201.16 implies ~13% upside potential over the coming twelve months.
Alphabet is Building a Self-Driving Empire, in Silence
Alphabet may not be generating the same buzz as some of its peers in the self-driving space, but its progress in the sector is both substantial and strategic. The company is already delivering more than 250,000 paid autonomous rides per week across the U.S., with operations in key markets like Los Angeles, Austin, and Phoenix. With expansion into additional major cities underway, this segment has the potential to become a significant contributor to Alphabet’s broader business, joining the ranks of Search, Google Cloud, and YouTube.
I remain bullish on Alphabet, driven by its impressive execution in autonomous mobility and its compelling valuation. The stock trades at a significant discount not only to high-profile names in the self-driving space, such as Tesla and Uber, but also to the broader market. For investors seeking exposure to the future of transportation through a fundamentally substantial and diversified company, Alphabet presents an attractive opportunity.