Finance Google's Waymo is crushing the competition and could be worth $135 billion, UBS says (GOOGL)

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"After conducting 22 industry expert interviews and forecasting the landscape, we see Waymo as the early leader (by a solid margin) in the emerging field of autonomous driving," Eric Sheridan, an analyst for the bank, told clients this week.

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(JLR/Waymo)
  • Google's self-driving subsidiary, Waymo, is easily the leader when it comes to self-driving cars.
  • The company has driven more miles than any other company, and could be worth $135 billion, UBS says.

Waymo, the self-driving car unit Google-parent Alphabet announced back in 2016, is miles ahead of its closest competitors — literally.

"After conducting 22 industry expert interviews and forecasting the landscape, we see Waymo as the early leader (by a solid margin) in the emerging field of autonomous driving," UBS analyst Eric Sheridan wrote in a note to clients this week.

He estimates the subsidiary could be worth anywhere from $25 billion to $135 billion, a huge chunk of Alphabet's overall enterprise value, thanks to a healthy mix of possible revenue from robo taxis, autonomous-vehicle technology/operating systems, in-car monetization time, and maps.

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(UBS)

"At our base case valuation of ~$75b, Waymo would be ~11% of Alphabet’s EV at current prices," Sheridan said.

Waymo has also driven far more autonomous miles than competitors at an ever-increasing pace. It hit 5 million total miles in February, blowing even the nearest competitors — including Nvidia, Tesla and more — out of the water.

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(UBS)

Testing does happen in other states, but miles driven on California roads allow for a more direct comparison. Waymo also drives four times the miles without needing human intervention than competitors, Quartz reported.

Still, a dichotomy exists in the space between companies developing their own technology to power fleets of autonomous cars, and companies that already have fleets (like ride-sharing companies) developing tech to stay relevant.

"The common theme at this point in the industry life cycle is that whichever direction they are coming at this opportunity from, companies recognize the importance of trying to control their own destiny and having optionality," UBS says.

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