Morgan Stanley: Waymo Mileage Falls Short of Expectations, Google Agent Integration Key to Revaluation

Ed, according to Chaoxiang Research, that Morgan Stanley’s October 6, 2026 research report indicates Waymo’s first-half driving mileage fell short of expectations by approximately 3%, with San Francisco, Phoenix, and Austin all performing below model forecasts. Morgan Stanley has increased its 2028 mileage projection by roughly 2%, anticipating approximately $20 billion in Waymo revenue by 2032 and a fleet size reaching 120,000 vehicles. Waymo logs approximately 370,000 miles per accident, roughly five times that of human drivers in the United States.

Morgan Stanley maintains an Overweight rating on Alphabet with a $400 target price against the current $347.68 share price. The firm asserts that Alphabet requires a valuation multiple re-rating anchored in AI agents, with Waymo serving as an underrated agent-driven differentiator. The Gemini Agent may eventually integrate calendar and email data to pre-plan Waymo routes. Although Waymo’s mileage faces near-term pressure, geographic expansion and agent integration remain pivotal for Alphabet’s valuation re-rating.