Why Alphabet Stock Could Be the First Big Winner of the Robotaxi Race

The future of autonomous driving is already happening in several cities, and one company is leading the way in the U.S. market. Waymo, owned by Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), is not the only robotaxi company in America; Tesla (NASDAQ: TSLA) is also developing its own autonomous driving technology.

But Waymo has built a significant head start over Tesla in putting self-driving robotaxis on the road. And although robotaxis are not the only possible reason for this, Alphabet stock has strongly outperformed Tesla stock during the past year.

TSLA data by YCharts

Here are a few important reasons Alphabet stock could be the first big winner of the robotaxi race.

Waymo is ready to grow fast

In a recent interview with Bloomberg, Waymo co-Chief Executive Officer Tekedra Mawakana said that by the end of 2026, the company expects to reach more than 1 million paid robotaxi rides per week in the U.S. That would be a 150% increase compared to its current rate of 400,000 rides per week.

The company is currently operating in six U.S. cities, including Los Angeles, Atlanta, and Phoenix. It plans to expand its autonomous ride-hailing services to 20 new cities this year, including London and Tokyo.

Image source: Waymo.

Waymo might have a technological edge

On Feb. 12, Waymo announced the launch of its sixth-generation Waymo Driver. The company says that this new technology will bring improvements in Waymo cars' ability to see and sense the world around them. This includes a new high-resolution sensor with 17 megapixel imaging, and sixth-generation LiDAR (light detection and ranging) digital sensor technology.

Waymo says that the new Waymo Driver technology will enable it to improve its robotaxis' driving capabilities (especially in rain and snow), while operating at lower costs. The company is also scaling up production of Waymo vehicles at its factory in Phoenix, with a goal of "tens of thousands" of vehicles per year.

Tesla offers what it calls Full Self-Driving (FSD) technology, but it has not yet been able to offer a passenger-ready robotaxi service at the same scale as Waymo. The Tesla Robotaxi ride-hailing service has rolled out only in Austin, Texas, and most cars still have human safety supervisors at the wheel. The company also offers a ride-hailing service in California with human drivers.

We're still in the early days of autonomous driving. We don't know how profitable robotaxi services will be, or how much they will add to Alphabet's stock price. But Waymo seems to be the clear winner of the robotaxi race in 2026. If I wanted to invest in the future of robotaxis, I'd buy Alphabet stock.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.