Waymo may be worth $200B+ using Tesla as benchmark—DA Davidson

Published 05/08/2025, 14:28
© Reuters

Investing.com -- DA Davidson said in a note to clients on Tuesday that Alphabet’s (NASDAQ:GOOGL) Waymo unit could be worth more than $200 billion as a standalone company, citing comparisons with Tesla’s robotaxi ambitions and urging a breakup of Alphabet to unlock shareholder value.

“We continue to believe the only way forward for Alphabet is a complete breakup that would allow investors to own the businesses they actually want — the top competitors to NFLX, AWS/Azure, NVDA, OpenAI, TTD and TSLA,” wrote the firm.

They added: “We believe Waymo could be worth >$200B or $16/share,” using Tesla’s current $1 trillion valuation as a benchmark.

DA Davidson said much of Tesla’s value is “derived from Robotaxi,” which has “trivial revenue,” while Waymo could generate over $700 million in 2026 from a 3,500-vehicle fleet.

The analysts argued that Waymo has “essentially validated” its prior-heavy autonomous driving stack, now operating more than 1,500 cars in four U.S. cities. 

“While the posterior-heavy approach taken by Tesla (NASDAQ:TSLA) is compelling, we believe there is sufficient room for both to flourish,” they added.

DA Davidson maintained its Neutral rating on Alphabet, but said it would see the company as “the top mega cap pick if it proceeded with a complete break-up.” 

The firm cited rising investor frustration over underperformance in Search, Cloud, and advertising relative to peers, and said Alphabet’s current multiple of 18x earnings could pressure the board to act.

“As this underperformance continues, shares will remain depressed and the imperative for a breakup will increase,” the analysts wrote. They added: “Every month GOOGL trades at 18x earnings we are a little closer to the board making the right decision.”

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.