Alphabet’s quiet $110B Waymo move blows up ‘other bets’ narrative

Alphabet is often viewed as “too big to fail.” However, even the staunchest of bulls will inevitably look to the “other bets” segment as the area needing the most work.

Until now.

Waymo, Alphabet's fast-growing autonomous-driving asset, is looking to drum up some cash, Bloomberg reports.

The aim? Something around $16 billion, in a round that will see valuation of the robotaxi business amount to nearly $110 billion, with Alphabet expected to finance roughly $13 billion of the total.

GOOGL stock recently traded around $338, giving Alphabet a market cap of about $2.94 trillion.

The Waymo robotaxi quote that matters

Waymo did not say "yes" or "no" regarding the fundraising details. Instead, it offered a piece of information that is hard to ignore.

That seems pretty different from the story that "robotaxis are coming someday." It's a signal regarding the scale of the endeavor we are targeting.

Waymo's funding details are big, but the cap table is the tell

The round will bring in money from new investors, including Sequoia Capital, DST Global, and Dragoneer Investment Group, as well as Alphabet's anticipated majority commitment.

For Alphabet shares, this isn't simply "Alphabet marking up its own asset."

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According to reports, third-party investors are prepared to pay more than $100 billion for Waymo.

Reuters also said that Waymo runs more than 2,500 cars and provides paid robotaxi service in the U.S. without a driver in the car, which sets it apart from many of its competitors.

Alphabet’s check is huge, but it’s not a balance-sheet threat

When you do the math, Alphabet's estimated $13 billion investment doesn't seem so crazy, considering Alphabet's $98.496 billion in cash, cash equivalents, and marketable securities as of Sept. 30, 2025.

So, a $13 billion check represents around 13% of that pile of cash and less than 0.5% of Alphabet's market valuation of almost $2.94 trillion.

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In other words, Alphabet can effortlessly finance Waymo. The greater issue is whether Wall Street will eventually start to include Waymo in Alphabet stock prices.

Plus, Waymo's most recent fundraising round in October 2024 gave the business a valuation of more than $45 billion. The Financial Times pegged the new valuation at $110 billion, which is more than double the previous high.

The valuation jump is the story, and it reframes “other bets.” For this reason, the investment helps immensely, despite the price tag.

The “juicy” Alphabet financial backdrop investors should remember

Let's delve deeper into Alphabet’s Q3 2025 earnings, which illustrate how it can keep feeding Waymo while also spending big on AI infrastructure.

• Revenue:$102.3B (up 16% year over year)
• Operating income:$31.2B
• Net income:$35.0B and EPS $2.87
• 2025 capex outlook:$91billion to $93 billion range

In this case, Alphabet is already in a capital-heavy AI arms race. It's still likely to spend a big check to make robotaxis bigger, but it has the cash war chest to keep spending without making a substantial dent.

Where Waymo ride service operates now

Waymo's own website says active rider service is available in the San Francisco Bay Area, Phoenix, Los Angeles, and Miami. The service will also debut in Atlanta and Austin.

That matters, since the "20 million trips" figure doesn't originate from a pilot. It comes from a company that's already doing business in big markets.

The Alphabet risk angle Wall Street will watch

The biggest risk for Alphabet is reputational. Any accident will result in a million headlines. And that headline risk is significant.

Just as an example, the U.S. auto safety agency National Highway Traffic Safety Administration recently opened an investigation tied to a Waymo incident involving a child in Santa Monica.

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The investigation might not lead to anything substantial. However, the headline itself can become problematic.

For Alphabet stock investors, this is the trade.

• Upside: Waymo's value can be used as a "asset value unlock" within Alphabet.
• Downside: Safety headlines and regulatory scrutiny may slow growth and reduce the potential for achieving high valuations.

What happens next for Alphabet stock

Bull case: In the best-case scenario, Waymo becomes less baggage and more of a grounded all-around performer. If everything goes as planned, it will become a visible, externally marked asset that investors can factor in when valuing Alphabet stock.

Base case: Nothing major happens. Alphabet just writes off a check, Waymo keeps growing, there is the odd Wall Street reaction, but nothing major, and Alphabet continues to get valued on Search + Cloud + AI capex discipline.

Bear case: GOOGL stock pops, but nothing major happens post-pop. In fact, the situation gets even more dire for Alphabet because investors now perceive the situation as an unnecessary cash drain in an already capex-heavy year.

The bottom line for me is that the latest fundraising round makes stockholders stand up and take notice. Waymo is an established company, not a speculative moonshot hidden away in "other bets."

If the company is real and keeps adding more trips, services, and areas at the same rate it does now, Wall Street won't be able to ignore it for much longer.

At that point, the scenario is not how much Alphabet is worth; it's how much is already priced in.

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