There’s a lot of investor excitement about driverless cars, yet Alphabet Inc.’s shares reflect little of that euphoria — even as its Waymo robotaxis proliferate in major US cities.

Waymo says its vehicles have driven more than 71 million miles without a human operator as the ride-hailing service expands across the country, but Alphabet shares have lacked the kind of buzz benefiting Tesla Inc. — whose stock jumped 8.2% on Monday after rolling out a rival product in Austin over the weekend, with just a handful of vehicles and some hiccups.

Alphabet has long traded at a significant discount to Big Tech peers because of its reliance on digital advertising for the bulk of its revenue. However, at 16 times estimated profits, its valuation is a fraction of Tesla’s at nearly 150 times, a multiple based heavily on expectations for a service that investors had been waiting years for.

“People are underestimating Waymo in a pretty significant way, while overestimating Tesla,” said Samuel Rines, macro strategist at WisdomTree. Alphabet’s valuation “assigns basically zero value to Waymo even though it has the best tech, it is already operating, and it has deals with OEMs,” referring to original equipment manufacturers.

Investor excitement about self-driving technology is rooted in the vast size of the potential market. Annual ride-hailing sales could exceed $325 billion by 2030, according to Bloomberg Intelligence estimates. As much as $20 billion of that could come from robotaxis, analyst Mandeep Singh wrote in a research note on Monday.

Waymo currently offers self-driving paid rides in Los Angeles, Austin, Phoenix and San Francisco and will offer trips through Uber Technologies Inc.’s platform in Atlanta later this year, followed by Miami and Washington next year. Last week, Waymo applied for a permit to test its vehicles in New York City, sending Uber and Lyft Inc. shares lower.

Waymo was valued at more than $45 billion in October, putting it roughly on par with the market capitalizations of both Ford Motor Co. and General Motors Co. It’s a drop in the bucket for Alphabet, however, with a market value of more than $2 trillion.

Still, Waymo is an increasingly attractive part of Alphabet’s portfolio and should offer “long-term upside” for shareholders, Morgan Stanley analyst Brian Nowak wrote in a research note last week.

Whereas Tesla’s rich valuation depends on its robotaxi service being rapidly adopted, there’s a risk that it could take years for a lot of customers to grow comfortable using autonomous vehicles, according to Rines. Alphabet’s other businesses including search, YouTube and Google Cloud diminish that risk, he said.

“I’m more comfortable buying Alphabet with the optionality of Waymo,” Rines said.

Shares of Alphabet are down 13% this year, underperforming the 4% gain of the Nasdaq 100 Index. Investors have been keyed into other issues, including potential antitrust risk and the company’s position with artificial intelligence. While Tesla shares trade at a premium, they’re down 14% in 2025 as Chief Executive Officer Elon Musk’s efforts to cut US government spending sparked a backlash from customers that have hurt sales.

Of course, there are those who think Tesla is well positioned with autonomous driving. Shawn Severson, chief executive officer of Water Tower Research, said that Waymo “has the commercialization advantage today,” but that Tesla’s manufacturing capacity would be important in producing its robotaxis at a greater scale. Still, he expects the market to be so large that both companies can thrive.

Alphabet doesn’t break out how much it makes from Waymo, but it serves more than a quarter-million paid passenger trips each week, up five-fold from a year ago, the company said in its most recent earnings call. In a measure of Wall Street’s growing interest, CEO Sundar Pichai said that was probably the first time he had been asked about Waymo on an earnings call.

Andrew Choi, portfolio manager at Parnassus Investments, believes Waymo is worth a lot more than is currently reflected in the stock while Tesla’s pricey valuation carries a lot of robotaxi-related risks.

“There’s no comparing the two, really,” Choi said. “One is live, scaling volume in a very impressive way, and getting people to pay. The other is still in development, and has been for years.”