Waymo unveils a self-driving Chrysler Pacifica minivan during the North American International Auto Show in Detroit, Michigan, U.S., January 8, 2017.  REUTERS/Brendan McDermid

Waymo will possess such a big lead in self-driving cars when it launches operations in Phoenix by the end of the year that analyst Mark Mahaney expects the market could start bidding up Google’s stock in the near-to-medium term.
In a report published Tuesday, Mahaney said that he sees Waymo’s management choosing one of two business models, either by buying cars and creating a transport company or by licensing out its self-driving operating system.
In the latter scenario, Mahaney predicts the payday could be big. He estimates that by 2030, Waymo’s operating profit could be as high as $35 billion and the company could be worth as much as $180 billion.

Once the self-driving car market matures in about a decade, Waymo, the subsidiary that Alphabet Inc. launched in 2016, stands to generate as much as $35 billion in operating profits, according to RBC Capital analyst Mark Mahaney.

But Alphabet, the parent company of Google, may not have to wait that long to start reaping benefits. In a report published on Tuesday, Mahaney wrote Waymo will possess such a big lead over rivals when it launches commercial operations in Phoenix later this year that investors could soon begin bidding up Alphabet shares.

“While the robo-taxi (Total Available Market) opportunity will likely be nascent in 2025, we believe that it will grow exponentially thru 2050,” Mahaney wrote. “We forecast a $3.8 trillion TAM in 2050.”

Alphabet has emerged as this generation’s equivalent of General Electric, the 126-year stalwart company known for the diversification of its businesses. For years now, Alphabet and its flagship company Google have made forays into a multitude of disparate sectors –including entertainment (YouTube), cellphones (Android), enterprise computing (Google Cloud) and autonomous cars.

Waymo has a huge lead and two potential …read more

Source:: Business Insider


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