Truist Securities Compares Waymo to Tesla’s FSD

Truist analyst William Stein reaffirmed on May 23, 2025, Telsa’s ‘Hold’ rating, maintaining a price target of $280.

“Waymo: What a long, strange trip it’s been…comparing it to TSLA’s FSD

Despite likely imperfections, expect TSLA’s Robotaxi service introduction to be a catalyst for the stock.

After test driving TSLA’s FSD in January 2025 and August 2024 previously, we recently tested Waymo’s service, riding from the Phoenix airport to a hotel 24 miles away.

We found Waymo’s technology to be wonderful, but imperfect…materially.

Based on our experience with FSD, we expect TSLA’s Robotaxi service, scheduled to debut in June in Austin, will likewise be imperfect, but in different ways.

Still, we expect TSLA’s Robotaxi introduction, even at small scale, will be a positive catalyst for the stock.

Waymo: What a long, strange trip it’s been

While we’ve taken short Waymo (Alphabet, GOOGL, Buy, Squali) trips in San Francisco previously, we recently used the service from the Phoenix airport to a hotel about 24 miles North.

We provide a summary view of positives, negatives, and comparison to Tesla’s FSD below.

• Positives: mostly, that it just plain works.

The Waymo app worked similarly to the Uber app. The car arrived on time. It drove us to the correct destination, and dropped us off at a reasonably normal spot.

The trip took approximately the forecasted time (but – more on this – see below). It was nice to not feel compelled to talk to a stranger in the driver’s seat.

The ride was downright inexpensive at $28.

• Negatives: in the pursuit of safety, Waymo sacrificed time & convenience.

The Waymo app said this 24 mile ride would take 70 minutes. We checked Uber (UBER, Buy, Squali) (35 minutes) and our maps app (33 minutes).

In the interest of research, we took the Waymo anyway. Yes, it took 70 minutes.

The car took all local roads, driving competently but not confidently – more like a slightly confused driver. On one sharp turn, the car bumped a curb.

Users might think they like the safety versus time/convenience trade off, but consider: would you regularly opt for a 2x as long trip?

We would sign up for that only in the pursuit of good research – not under normal circumstances.

• In comparing Waymo vs. FSD, both are amazing, but both are imperfect, and in different ways.

Ever since TSLA’s CEO Elon Musk insisted on it, we have been test- driving and reviewing the company’s FSD technology (see our most recent and second most recent reviews).

We assess Waymo as fun and interesting, but it’s hard to imagine we would use it regularly in its current state.

Turning to Tesla’s emerging Robotaxi service, we anticipate two potential outcomes.

The more likely one, in our opinion, is that TSLA takes a similar approach that it has in FSD: optimize for typical driving conditions and typical operations, but likely have more accidents.

The less likely, but still possible. alternative is that TSLA optimizes for safety.

In this case we expect the service to look more like Waymo: so safe that it’s not fit for purpose.

Al projects are extremely important to TSLA’s valuation, in our view

Our PT for TSLA of $280 is based on a DCF for each of TSLA’s main businesses.

While some investors may believe that either this is “just a car company,” or that “Al projects are not contemplated in the valuation”, we completely disagree.

Considering TSLA’s recently lower growth & margins, we estimate the auto business (excluding Supercharging, energy gen & storage, etc.) is only worth about $25/sh.

We estimate that the Al projects (FSD, Robotaxi, Optimus, and Dojo) are collectively worth $205/sh.

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.