Waymo Has a Tesla-Like Recall. What It Means for Alphabet Stock. -- Barrons.com

Dow Jones06-18 21:56

By Al Root

Waymo is recalling 3,871 robo-taxis to correct software that might allow a vehicle to enter a freeway construction zone, according to a National Highway Traffic Safety Administration notice.

There are several takeaways for investors.

For starters, it illustrates the size of the Waymo robo-taxi fleet. There are at least 3,800 Waymos in 11 cities, with more on the way. The Alphabet-owned ride-hailing network operator is expanding across the country, along with other companies, including Tesla, Amazon.com-backed Zoox, and others.

Next, it illustrates the kinds of problems robo-taxis are running into these days. Humans probably know not to drive through a construction zone. AI-trained robo-taxis don't really know that until they learn. There are endless so-called edge cases -- unusual situations -- that could trip up self-driving cars. Waymo and other operators have to deal with them over time.

Edge cases haven't stopped the technology from working. Safety data analyzed by BofA Securities analyst Alexander Perry and others show a 90% reduction in serious accidents with Waymo robo-taxis, compared with human drivers. The car drives safely while it learns.

Third, it illustrates the importance of software in modern cars. The recall is very Tesla-like. Most of Tesla's recalls are corrected via over-the-air software updates -- cars never have to visit the shop. That's likely what will happen with Waymo, too, although they are still working on the fix. For now, the company has restricted freeway driving.

Robo-taxis are here: Some 50 million Americans live close enough to a robo-taxi to take a ride if they want. More are coming. Investors and drivers will have to get used to safety data, recalls, and stories about their operation.

The Waymo recall doesn't appear to be significantly affecting Alphabet stock. Shares are down 0.4% in premarket trading at $363.79, while S&P 500 futures were up 0.6%. Coming into Thursday trading, Alphabet stock was up 110% over the past 12 months.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

 

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June 18, 2026 09:56 ET (13:56 GMT)

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