Waymo is working to develop fully autonomous vehicles. The company believes that this technology can save lives. Roughly 1.4 million people die on the roadways each year, including more than 35,000 in the U.S. An estimated 94% of crashes in the U.S. are due to human error or impairment. In addition to saving lives, Waymo believes that autonomous driving technology can empower people who can't drive due to age or disability with the freedom of mobility.
The company is building Waymo Driver, the world's most experienced driver. The technology has logged more than 20 million miles on public roads. Waymo is working to monetize this autonomous driving technology through Waymo One, its public, fully autonomous ride-hailing service, which it is expanding to new cities across the country.
Analysts believe that robotaxi services like Waymo One could grow into a more than $100 billion revenue opportunity for the company. That growth potential makes Waymo a compelling investment opportunity. Here's everything you need to know about investing in the company before it completes an initial public offering (IPO) and some other autonomous driving companies to consider.
IPO
Is it publicly traded?
Is Waymo publicly traded?
Waymo isn't a publicly traded company. It's a subsidiary of Alphabet (GOOG 1.72%)(GOOGL 1.54%) that was launched after Google spun off its self-driving car project to create Waymo. In addition to Alphabet, Waymo has raised money from other investors. In 2021, the company raised $2.5 billion from investors, including Andreessen Horowitz, AutoNation (AN 0.25%), Canada Pension Plan Investment Board, Fidelity Management & Research Company, Magna International (MGA 2.28%), Mubadala Investment Company, Silver Lake, funds and accounts advised by T. Rowe Price (TROW 2.79%), Temasek, and Tiger Global. It has raised $5.5 billion from investors via three funding rounds.
IPO
When will Waymo IPO?
Waymo didn't have an IPO on the calendar as of mid-2024. Many believe that the company will eventually go public. While it's a majority-owned subsidiary of Alphabet, it has raised $5.5 billion from outside investors to help fund its research and development. Those investors will eventually want to cash in on that investment, which would likely come via a sale or IPO.
How to invest
How to buy Waymo stock
Because Waymo isn't a publicly traded company, you can't buy shares in a regular brokerage account yet. However, accredited investors (i.e., those with a high net worth or high annual income) can sometimes purchase pre-IPO shares of companies like Waymo on a secondary marketplace like Forge Global (FRGE 3.12%) and EquityZen.
Non-accredited investors will have to wait for Waymo's IPO to buy shares. In the meantime, they could consider investing in a publicly traded company that is investing in autonomous driving. Here are three alternative options to consider:
Alphabet
Alphabet (GOOG 1.72%)(GOOGL 1.54%) subsidiary Google started developing self-driving technology in 2009. In 2015, it renamed its project Waymo and spun it out to its parent company, Alphabet. It remains a majority-owned subsidiary of Alphabet. That makes buying shares of Alphabet an indirect way to invest in Waymo. If Waymo eventually goes public, Alphabet could spin off its stake to its shareholders.
Tesla
Tesla (TSLA -3.46%) has developed self-driving technology for its vehicles. Autopilot comes standard on every new Tesla. Meanwhile, Tesla owners can subscribe to the company's full self-driving (FSD) capabilities (which still require hands-on supervision by a human driver). Tesla's FSD technology is continuously improving as the company strives toward its goal of achieving level 5 self-driving in the future (where the vehicle can drive itself in any condition without human involvement). The company is investing heavily in artificial intelligence (AI) to drive greater automation.
Artificial Intelligence
GM
GM (GM 2.92%) bought self-driving car startup Cruise in 2016. The company and outside investors have poured billions of dollars into the subsidiary over the years. In addition to pursuing fully autonomous driving through Cruise, the company is working to bring hands-free driving to the market through Super Cruise, an advanced driver assistance system. GM's Cruise subsidiary had to hit the brakes on testing its vehicles on the road in 2023 after one of its autonomous vehicles hit and dragged a pedestrian. However, it has slowly gotten its cars back on the road in 2024 to resume testing its autonomous technology.
People who want to invest in one of these Waymo alternatives can buy shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks.
Step 1: Open a brokerage account
You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time researching the brokers to find the best one for you.
Step 2: Figure out your budget
Before making your first trade, you'll need to determine a budget for how much money you want to invest. You shouldn't invest any money that you think you'll need in the next three to five years. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years.
You don't need to buy all those stocks at once, though. For example, if you have $1,000 available to start investing, you might want to begin by slowly allocating that money equally across at least 10 stocks and then grow your portfolio from there.
Step 3: Do your research
It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to make sure you have a solid grasp on whether the company can grow value for its shareholders over the long term. You should also research related companies like Alphabet, Tesla, and GM.
Step 4: Place an order
Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The stock ticker (GOOG/GOOGL for Alphabet, TSLA for Tesla, or GM for GM).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you'll be able to buy shares immediately at market price.
Once you complete the order page, click to submit your trade and become a shareholder in one of these early investors in autonomous driving technology while you await Waymo's IPO. Investors would follow a similar process to buy an IPO stock like Waymo when it goes public. Once shares become available, fill out the order page at your brokerage account with the autonomous vehicle company's selected stock ticker and submit your trade.
Profitability
Is Waymo profitable?
Alphabet doesn't break out the profitability of its "other bets" segment, which includes its investment in Waymo, so we don't know if Waymo is a profitable company.
However, Waymo is likely not profitable yet. Alphabet's other bets produced $365 million in revenue in the second quarter of 2024. Meanwhile, that subsidiary posted an operating loss of $1.1 billion. Given those numbers, Waymo likely isn't making money yet.
The company is still investing heavily in researching and developing its autonomous vehicle technology. It likely has a long way to go before it's on the road to profitability. However, the market potential for robotaxi technology is vast, with some analysts projecting it could be a $144 billion revenue opportunity for Waymo in the future.
Should I invest?
Should I invest in Waymo?
You can't currently invest directly in Waymo because it's not a publicly traded company. That gives you plenty of time to research the company while you await its IPO to decide whether it's a good fit for your financial situation. With that in mind, here are some reasons why you might consider investing in the autonomous driving company:
- You think autonomous driving is the future.
- You believe Waymo can tap into the tremendous robotaxi market potential.
- You think that Waymo can eventually become a very profitable company.
- You want to invest in a company Alphabet has built from the ground up.
On the other hand, here are some reasons why investing in Waymo might not be best for you:
- You're not sure enough of the population will ever be comfortable with riding in fully autonomous vehicles.
- You don't think Waymo can ever get on the road to profitability.
- You're concerned about potential safety issues with autonomous driving.
- You're not sure if Waymo will emerge as the technological leader in autonomous driving.
ETFs
ETFs with exposure to Waymo
You can't currently invest indirectly in Waymo via exchange-traded funds (ETFs) because it's a private company owned by Alphabet and other investors. However, you can use ETFs to invest in the autonomous driving trend. Here are three autonomous vehicle ETFs to consider:
- Global X Autonomous & Electric Vehicle ETF (DRIV 1.04%): This fund invests in companies involved in developing autonomous and electric vehicles. It had 75 holdings in mid-2024, including Alphabet (second-largest at 3.1% of the fund's net assets) and Tesla (fifth-largest at 2.8%). The fund had a 0.68% ETF expense ratio.
- KraneShares Electric Vehicles & Future Mobility Index ETF (KARS 0.51%): This ETF focuses on companies investing in electric vehicles, autonomous driving, shared mobility, lithium and copper production, batteries, and hydrogen fuel cells. The fund had 65 holdings in mid-2024, including Tesla (largest at 5.9%). The ETF had a 0.72% expense ratio.
- SPDR S&P Kensho Smart Mobility ETF (HAIL 1.98%): This fund focuses on companies driving innovation in smart transportation, including autonomous vehicles, drones, and advanced transportation systems. The ETF had 71 holdings in mid-2024, including Tesla (fifth-largest at 2.2%). The fund had a 0.45% expense ratio.
The bottom line on Waymo
Waymo is one of the early leaders in autonomous driving. The company has the backing of tech titan Alphabet and other leaders in the venture capital technology and automotive worlds. While it's still in the early stages of developing and testing its technology, it has tremendous potential. Because of that, it's a very exciting company to watch since its technology could save countless lives while empowering the immobile with the freedom of mobility.
Related investing topics
The bottom line on Waymo
Waymo is one of the early leaders in autonomous driving. The company has the backing of tech titan Alphabet and other leaders in the venture capital technology and automotive worlds. While it's still in the early stages of developing and testing its technology, it has tremendous potential. Because of that, it's a very exciting company to watch since its technology could save countless lives while empowering the immobile with the freedom of mobility.
FAQ
Investing in Waymo FAQ
Can you buy shares in Waymo?
Most investors can't buy shares of Waymo because it's not a publicly traded company. However, you can invest in its majority owner, Alphabet. The technology giant trades on the Nasdaq Stock Exchange under the stock tickers GOOG and GOOGL.
What company owns Waymo?
Waymo is a majority-owned subsidiary of Alphabet. Several automotive companies and venture capital funds have also invested in Waymo.
Will Waymo go public?
Waymo could go public in the future. While it's currently a majority-owned subsidiary of Alphabet, the technology giant has sold a minority interest in the company to other investors over the years to raise capital to fund Waymo's investments in research and development. Those outside shareholders will likely want to eventually monetize their investment, which could come from a sale or IPO.
Does Google own Waymo?
Google's parent company, Alphabet, is the majority owner of Waymo.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matt DiLallo has positions in Alphabet, T. Rowe Price Group, and Tesla. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool recommends General Motors, Magna International, and T. Rowe Price Group and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
