We recently compiled a list of the 11 Best Self-Driving Car Stocks to Buy According to Analysts. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against the other self-driving car stocks.

The term “self-driving car stocks” describes publicly traded businesses engaged in creating, manufacturing, or using autonomous vehicle technology. These businesses either directly contribute to the development of self-driving systems or offer crucial parts and services to the autonomous driving industry.

The autonomous vehicle market is booming. Grand View Research estimates that the global market for autonomous vehicles was worth $68.09 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 19.9% from 2025 to 2030. The industry is driven by the significant demand for tech adoption by customers, road safety, connectivity, advancements in AI, and sensor technology. In 2024, the passenger vehicle segment led the industry and accounted for 69% of the global revenue. The North American autonomous vehicle market dominated the global market with a share of over 37.1% in 2024.

On the other hand, according to Goldman Sachs Research, Level 3 autonomous cars, which permit hands-off, eyes-off driving in some situations, might make up as much as 10% of new cars sold globally by 2030, down from a previous estimate of 12%. It is anticipated that level 4 fully autonomous vehicles will account for 2.5% of sales, up from 3.5% in the past. Vehicles classified as Level 2 and Level 2+, which need to be supervised, are projected to rise from 20% at present to 30% by 2027. Adoption is expected to speed up due to AI advancements and declining hardware prices, notwithstanding delays caused by technological, legislative, and business model obstacles. By 2030, a market for robotaxis valued at over $25 billion would develop, driven by commercial AV fleets. By 2030, the cost of an AV mile might be less than $1, and by 2040, it could be $0.58. Long-term, AVs may account for 60% of new light vehicle sales worldwide by 2040, with China dominating (90%), followed by Europe (80%), and the United States (65%).

As per S&P Global’s report, the industry’s focus on self-driving cars has changed from lofty Level 5 autonomy to practical, incremental applications. Tech firms and manufacturers came together at CES 2025 with realistic objectives, especially in the area of Level 4 autonomy. Companies increasingly prefer deployable technology, such as ride-hailing services and automated shuttles, above completely autonomous personal vehicles. Leading this shift is Waymo, which reports more than 4 million trips overall and 150,000 paid rides weekly. It displayed new Hyundai and Zeekr automobiles, growing its business in additional American cities and adjusting to local laws. These actions show ride-hailing’s scalability in light of the present limitations.

Meanwhile, conventional automakers showcased autonomous shuttle concepts, while Level 2+ and Level 3 ADAS systems continue to be used in consumer vehicles. As startups with specialized inventions, like AI chips or sensor software, work with larger companies that have the resources and manufacturing capacity, partnerships are growing. Smaller players struggle to operate on their own because of high R&D expenses and regulatory complexity. As the market transitions from hype to practical implementation, Level 4 geo-fenced applications and delivery systems are expected to be the next big thing. The autonomous future is increasingly defined by gradual, cooperative progress rather than disruptive leaps.

Methodology

For this list, we thoroughly reviewed reputable sources and compiled an initial list of 20 self-driving stocks. Then we selected the 11 stocks that had the highest upside potential as of April 22, 2025. We have only included stocks in our list with an upside potential of 14% or higher. The stocks are ranked in ascending order of the upside potential.

Note: Not every company included in the list is solely focused on self-driving technology. Some of the stocks highlighted below are involved indirectly by investing in businesses that specialize in autonomous driving.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

Alphabet Inc. (NASDAQ:GOOG)

Analysts’ Upside Potential as of April 22: 27.03%

One of the leading companies in the self-driving car space and Best Autonomous Driving Stocks is Alphabet Inc. (NASDAQ:GOOG), the parent company of Google. The key to self-driving automobiles is data, specifically the use of road data to teach an artificial intelligence system how to drive a car. Google has a clear advantage in this regard due to its extensive index of online information. All types of businesses utilize Google Cloud, a subsidiary, to manage autonomous car design and manufacture, train self-driving AI algorithms, and handle vehicle software updates.

The leading autonomous car startup, Waymo, has invested in Alphabet Inc. (NASDAQ:GOOG). Google has been funding Waymo’s research and development for years with its wildly successful online advertising company. Waymo is developing its “Waymo Driver” system for use as an autonomous ride-hailing service (Waymo One) and a heavy freight and delivery solution (Waymo Via).

Waymo’s autonomous vehicles are currently operating in Austin, San Francisco, Los Angeles, and Phoenix. In its service zones, Waymo One, the company’s self-driving ride-hailing service, is open twenty-four hours a day, seven days a week. As of right now, Waymo has about 700 autonomous vehicles on the road; since 2019, the fleet has traveled over 20 million miles.

Merion Road Capital Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

“The long only portfolio fell slightly over 8% during the quarter, primarily attributable to our tech-oriented holdings (GOOG, AMZN) and economically sensitive industrials (CLH, FERG). Regarding the former, there continues to be a debate as to whether or not their investments in AI will produce adequate returns. The AI race publicly began back in 2023 when Microsoft CEO Satya Nadella threw the gauntlet down stating that he hopes GOOG would “come out and show that they can dance.” In response, Alphabet Inc. (NASDAQ:GOOG) ramped their capex spend from $32bn in 2023 to almost $53bn last year, with a planned $75bn this year. So far, their pre-tax return on tangible capital has barely budged at 48% (though consensus has this falling next year). With a wide range of ubiquitous products, GOOG is as well positioned as anyone to win the war. For instance, the integration of AI overviews into search has produced strong metrics and the company is broadening its application to encompass novel query formats, including images and audio.

But will all of this investment generate an acceptable return? I don’t know. And it will be many years before we have an answer. CEO Pichai’s philosophy is that the cost of missing out on what could be a generational opportunity far outweighs the benefits of conserving its cash. This makes sense to me. Even if GOOG burns the majority of their free cash flow over the next couple years, that’s a drop in the bucket. The value in the business comes from the long tail of earnings from things like Search, Youtube, Cloud, and hopefully some of their moonshots (I’m looking at you Waymo). If AI returns disappoint, I believe GOOG will scale back.”

Overall, GOOG ranks 8th among the best self-driving car stocks to buy according to analysts. While we acknowledge the potential of GOOG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.