Alphabet's Stock Outlook Amid AI Threat and Waymo Launch

Alphabet's stock is currently priced lower than its peers, but the company's search business continues to grow despite AI advancements. Waymo's strong start in Austin signals potential growth, making Alphabet a compelling investment compared to Uber's uncertain position.

Date: 14-04-2025

AI Rating: 7

**Earnings Performance**
Alphabet's stock price depreciation can be attributed to tariff-related uncertainties and competitive threats from generative AI which raises concerns over its core revenue streams. Nevertheless, consistent double-digit growth in its search sector is noteworthy, defying fears surrounding new AI introductions. Such resilience in revenue generation strengthens the company's current standing.

**New Revenue Streams**
Waymo's rollout in Austin, demonstrating a strong adoption rate, hints at significant future revenue generation possibilities. With 80% more rides logged than its initial San Francisco launch, this growth suggests that autonomous taxi services may solidly contribute to Alphabet's earnings. Waymo's potential to establish a standalone revenue stream adds positive sentiment towards Alphabet's diversified business model.

**Comparative Valuation**
At present, Alphabet presents an attractive valuation with a P/E ratio below 20, making it the cheapest among the Magnificent Seven stocks. Despite growth prospects in areas like YouTube and Google Cloud, the stock might attract investors who are seeking value amidst emerging uncertainty in the tech landscape.

**Implications for Uber**
While Alphabet is moving positively, Uber is seen as navigating uncertain waters due to its role as a platform for Waymo's services. The collaborative nature of their arrangement could drive revenue for Uber but also places it at risk of future competition from Waymo should it decide to launch a standalone app. This scenario creates apprehension surrounding Uber's long-term value proposition.

**Conclusion**
Overall, Alphabet seems poised for a recovery, bolstered by its search service's performance and Waymo's promising start. The potential for new revenue streams from autonomy gives it a competitive edge over Uber, allowing investors to view it as a more attractive investment at this juncture.

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