In Alphabet's third-quarter earnings report, the Other Bets segment, which includes Waymo, generated $372 million in revenue, reflecting an 8% increase year-over-year but still only accounting for 0.3% of total sales. The operating loss for this segment widened to $2.05 billion, up from $1.43 billion a year ago.
CEO Sundar Pichai highlighted Waymo's growth, noting its operations in 15 major U.S. cities and plans to expand into international markets, including Germany by 2027. Despite its leading position in the U.S. robotaxi market, Waymo faces competition from companies like Amazon's Zoox and Tesla, which are also developing autonomous vehicle technologies.
Alphabet's overall financial health is under scrutiny, as the company reported negative free cash flow exceeding $9 billion for the quarter, attributed to heavy investments in artificial intelligence. Waymo recently secured a $5 billion term loan, marking its first debt financing, and previously raised $16 billion at a $126 billion valuation.
While Pichai expressed confidence in Waymo's trajectory, the significant losses and Alphabet's earnings miss, which led to a nearly 10% drop in stock price, indicate potential challenges ahead for investors