Tesla, Alphabet, DoorDash: Self-driver winners?
Wedbush is backing companies it believes can win the race to build self driving cars, after hosting an adviser call with a senior executive from Cruise, General Motors’ autonomous unit. The broker’s central message is that “data and scale will decide the outcome”, with market share “ultimately” concentrating in a small group of leaders such as Alphabet’s Waymo and Tesla.
On the stock side, Wedbush is clear. It has Outperform ratings on Tesla, Alphabet, Amazon and DoorDash. It sets a $600 target price for Tesla, against a recent share price of $458.96. Alphabet’s target is $320, compared with $309.29. Amazon’s target is $340 versus $226.19. DoorDash has a $260 target against $227.49.
The broker is more cautious on some of the other names in the ecosystem. It is Neutral on Uber, with a target of $84 versus a recent price of $85.11, and Neutral on Lyft, with a $20 target against $20.37. It is negative on Instacart owner Maplebear. That stock is rated Underperform, with a target of $36 versus $44.96.
The call underlined how Tesla and Waymo are following very different paths to autonomy. Tesla uses cameras and software in customer cars and harvests huge amounts of real world driving data. That data feeds into its systems and, in theory, improves performance over time. Waymo, bankrolled by Alphabet, has chosen a more expensive set up with many sensors on each vehicle. The aim is higher safety and faster early roll out in each new city.
A key part of Waymo’s approach is its in house laser sensor technology, known as lidar. Wedbush’s expert said the company has cut the cost of its fifth generation lidar hardware by more than half compared with the previous version. In a separate deep dive, the broker estimated that the average lidar sensor could cost about $4,500 in 2025 and that this cost should keep falling.
Waymo has also speeded up how it prepares and maps new cities for robotaxi services. According to the call, what once took several years now takes “weeks to months” before full autonomous testing can begin on public roads. New York City is seen as the ultimate test of these systems, given its density, traffic, and complex road layouts.
Regulation came up as a key concern. The adviser argued that this is not the main brake on roll out. Internal safety rules matter more. Tesla has accepted more risk in testing and has had high profile accidents. Waymo has expanded more slowly and with tighter limits.
Wedbush also sees room for different technical approaches to succeed. The report notes that “vision led” systems, which rely mainly on cameras, look capable of reaching level four autonomy, where a car can drive itself in most conditions without human input. In the broker’s view, the question is when this level is reached, not if. For now, it is putting money on the big technology groups and the platforms that stand to benefit from them.
