Alphabet Inc. (NASDAQ: GOOGL) has experienced remarkable growth in the latter half of the year, recently overtaking the broader market. Factors that were once seen as obstacles have now transformed into robust advantages for the tech giant. Fears regarding artificial intelligence competition have eased, restoring Google’s position as a leading force in the emerging fields of enterprise AI and cloud computing. Moreover, regulatory concerns related to the potential breakup of Chrome have diminished, allowing Alphabet’s primary business segments to thrive.
As Alphabet’s profitability improves across its Google Services and Google Cloud segments, some investors may not realize the significance of the company’s “Other Bets” division. This segment encompasses innovative projects, referred to as moonshots, that, while not yet contributing significantly to revenues, hold the transformative potential to disrupt entire industries. Among these ambitious projects is Waymo, Alphabet’s autonomous driving subsidiary.
Waymo is at the forefront of Alphabet’s Other Bets portfolio, which aims to foster innovation outside of its main advertising and search frameworks. Alongside long-term projects like Verily (health technology) and Wing (drone delivery), Waymo has made notable strides in the autonomous vehicle space. Even though Other Bets recorded a revenue of $373 million with a loss of $1.25 billion in Q2 2025, the losses reflect Alphabet’s commitment to embracing long-term growth through innovation, with Waymo as a key player in this vision.
Waymo has successfully rolled out commercial, fully driverless ride-hailing services in several U.S. cities, including Phoenix, San Francisco, and Los Angeles, with further expansion plans in Atlanta and Austin. The company has accumulated millions of autonomous miles and provided over 10 million paid rides, using vehicles equipped with advanced sensors and technology. In a significant move, Alphabet pledged an additional $5 billion to Waymo’s development, highlighting the project’s importance to its strategic goals.
The latest development in Waymo’s journey is its announcement to test its driverless ride-hailing service in London, marking its first entry into the European market. Testing will commence in the coming months, with human safety specialists overseeing operations. If successful, full commercial service could start as early as next year, subject to regulatory approvals. London, with its complex transportation network, poses a demanding environment for autonomous vehicles, and success here could enhance Waymo’s credibility globally and facilitate further adoption in other European cities.
In the U.S., Waymo is aggressively expanding, preparing to offer services in Miami and Washington, D.C., while having secured test permits in New York City, a noteworthy step toward operating in one of the world’s most complex urban settings.
While Waymo’s impressive advancements may not yet warrant a standalone investment in Alphabet, its long-term potential is evident. Should Waymo achieve successful regulatory approvals and develop a scalable model, it could become a substantial revenue driver for Alphabet, similar to the early growth trajectories of YouTube and Google Cloud.
Currently, Alphabet’s strength and appeal to investors lie predominantly in its core businesses. The company continues to excel in AI, cloud computing, and its advertising operations while maintaining one of the strongest balance sheets in the industry. With its stock showing considerable gains this year, investors may be wise to await market corrections before increasing their holdings.