Alphabet (NASDAQ: GOOGL) is facing some investor anxiety as multiple Waymo self-driving cars were attacked during protests in Los Angeles over the weekend.
An Alphabet subsidiary, Waymo has been considered an important piece in the company’s future growth strategy, so public relations setbacks could result in short-term volatility and monetary losses, as Each Waymo vehicle costs between $100,000 and $200,000.
California is also one of the company’s key predicted markets. For instance, Waymo covers around 20% of all rides in San Francisco. Consequently, pauses in infrastructure expansion could pose additional problems down the line.
At the time of publication, Alphabet shares sit at $174.92, only marginally up in pre-market (0.31%) and remaining unafected by the happenings in LA.
Google stock performance
Alphabet has reported a 14% year-over-year (YoY) revenue growth to $90.2 billion for Q1 2025. Core segments like YouTube and cloud services contribute significantly to revenue. Google Cloud, in particular, has been doing well, with $2.2 billion in Q1 2025 operating income and 28% YoY growth.
Despite the solid performance, Alphabet’s stock appears relatively undervalued, with a price-to-earnings (PE) ratio under 19, which is far lower than other artificial intelligence (AI) leaders. NVIDIA (NASDAQ: NVDA), for instance, has a PE ratio of 46.47.
Moreover, YouTube’s advertising and subscription businesses bring in roughly $10 billion per quarter and add to Alphabet’s resilience. What’s more, the company is working on monetizing AI tools. Its Google AI Pro plan is $20 a month, for example, while the Google AI Ultra goes for $250 a month.
In other words, betting against the stock because of potential short-term setbacks following the Waymo incidents might carry risk, as the company’s diverse revenue streams make rebounds from short-term volatility more than likely.
Featured image via Shutterstock
