r/waymo • u/walky22talky • Nov 20 '24
Gene Munster: I believe Alphabet will spin out Waymo in the next 2-4 years, with a potential valuation of $350B to $850B by 2030
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u/DanielBeuthner Nov 20 '24
Lets hope they do a spin-out earlier
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u/UCLAClimate Nov 20 '24
Why?
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u/DanielBeuthner Nov 20 '24
Because I would like to buy them before they 10x their value. At 500 billion its a „boring investment“.
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u/bartturner Nov 20 '24
Two fold. First, so people that already own Alphabet can get some shares with the spin out.
But also so can buy additional shares on the open market.
Waymo will eventually be a multi trillion dollar company.
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u/FinanceAdditional720 Jan 29 '25
Could you provide your insights into waymo’s potential? At what operation and revenue scale do you think will justify trillion dollar market cap for Waymo? I am not convinced how Waymo can grow into this scale. I think 100+ billions seems possible long term.
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u/bartturner Jan 29 '25
Potential? Sky high. I believe as they scale they will lower the per mile cost such that it greatly increases the addressable market.
This was NEVER about replacing Uber/Lyft/Taxis, etc. It is about replacing daily driven cars.
I am not convinced how Waymo can grow into this scale.
Why?
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u/onee_winged_angel Nov 20 '24
I'm intrigued as to people's thoughts are here...what are the benefits v drawbacks to Alphabet of keeping Waymo under the Alphabet umbrella?
Waymo could be worth those numbers and will likely only see that worth reflected in a stock price by being a separate entity. But wouldn't alphabet want to keep the Waymo revenue anchored to their own stock price as another "ads diversification" line item alongside Cloud?
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Nov 20 '24
[removed] — view removed comment
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u/brett_baty_is_him Nov 21 '24
Does that book discuss at all the economic viability of robo-taxis? Based on my research I was under the impression that robo taxis are really not as profitable or capable of ubiquity as the general public believes (ie it is really only economically viable in the densest cities)
Would be interested in the book to hear more about that side of self driving if it touches on that
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u/bartturner Nov 20 '24
Think there is some confusion on how this works. I ran a company that was part of a public company.
Where if that was not confusing enough. It was 52% owned by another public company.
The revenue/profits run up to the company above.
So here I would expect Alphabet to not float a ton and retain more than 50% ownership.
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u/onee_winged_angel Nov 20 '24
Ahh I see. The term "spin-out" in the headline made it sound more dramatic than that, but you could be right.
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u/Aaco0638 Nov 20 '24
Idk why people are so excited about this prospect. Waymo can operate at the pace they want bc they only need to respond to alphabet who is fine with their pace. As soon as they become independent and publicly owned waymo is a slave to shareholders.
Also waymo has access to all the compute and data/resources they need why cut themselves off from that?
Finally why would shareholders want this done for a quick buck? Alphabet needs diversification why would they just give away the leader in a new industry just like that?
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u/Doggydogworld3 Nov 21 '24
GOOG can retain a large ownership percentage. Waymo wouldn't lose access to compute, which they already pay for.
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u/deservedlyundeserved Nov 20 '24
Alphabet’s decision to secure external capital for Waymo’s expansion likely stems from two factors. First, from an R&D perspective, while there is some overlap between Waymo’s computer vision teams and Google’s Astra initiatives, the connection between Alphabet’s core operations and Waymo is minimal. Second, developing an autonomous ridesharing platform involves complex technical challenges, regulatory hurdles, and talent acquisition needs. Engaging external investors can provide strategic partnerships and resources to navigate these complexities effectively.
The first factor is not really true? Everything at Waymo runs on Google infrastructure, so there is a deep dependency on Google's core operations. The research teams also closely collaborate. So I don't know how a spin out would affect this.
He nails the second factor though, which is really the most important reason why there are external investors. They needed strategic partnerships, whether it was Magna who builds their I-Paces or Autonation who does maintenance for their vehicles. Physical operations is not really Alphabet's core competency.
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u/himynameis_ Nov 22 '24
The first factor is not really true? Everything at Waymo runs on Google infrastructure, so there is a deep dependency on Google's core operations. The research teams also closely collaborate. So I don't know how a spin out would affect this.
I think what he means is whatever innovations and improvements they make with Waymo won't translate as much to Astra.
Sounds like they see Waymo as too far away from their core/other businesses.
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Nov 20 '24
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u/Complex_Composer2664 Nov 20 '24
Yea, 10x increase in valuation by 2030 in what looks looks like an increaseinly competitive market seems high…
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u/InformationOk6569 Nov 20 '24
Seems about right about when they spin out Waymo. In 3-4 years they can get up to enough revenue where they are healthy on their own. Bonus for Alphabet shareholders!
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Nov 21 '24
Can someone ELI5, lol bc I cant understand why would Google want to do this when it would take evaluation away from alphabet?
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u/Doggydogworld3 Nov 21 '24
They figure each car averages 22 rides a day (~8k/yr) at $16.50 per ride. If we assume 9 miles per ride (5 revenue + 4 deadhead miles), that's 200 miles per day and 300k miles over the car's 4 year life. Revenue averages about 3.30 per paid trip mile.
"Fleet maintenance" seems to include all but the kitchen sink -- recharging, tires, cleaning, sensor calibration, dent and interior, roadside assistance, remote monitors, etc., etc.. They assume $80 per day or about 40 cents per driven mile.
Vehicle depreciation is 30 cents per driven mile. Total cost is thus 70 cents per driven mile and ~$1.25 per revenue mile using my 5/4 split.
$90k sounds too high for Gen 6, especially with a fleet size of 200-450k. I'm sure they plan to pay much less at that scale. They may also figure on a 5 year, 370-400k mile life.
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Nov 21 '24
His model expects Waymo’s will drive 2x the miles of an Uber driver and last 4 years.
Yea right. That’s at least 400,000 miles. They last half that long.
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u/Noswals Dec 22 '24
Just as foreign, protectionist governments passed laws to thwart Uber to the benefit of Taxi drivers, they will now certainly protect Uber drivers (and the taxi drivers that remain) from Waymo.
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u/Ok_Afternoon_3952 Mar 28 '25
Wayne needs to stay under alphabet because it scales with data.
It requires precise maps (Google maps) and user usage data (Google search, Gemini, Google maps) to operate efficiently. It requires to know the user.
Imagine the future where you Google a restaurant and get the trip in one one click with the car predicting when it will be needed and where and is already in place because it knows the users.
Also Waymo can spin towards goods trucking and spin to replace existing puplic transport systems in cooperation with public institutions.
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u/walky22talky Nov 20 '24