Why Alphabet Stock Stumbled Thursday Morning

Shares of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) slipped on Thursday morning, falling as much as 3.8%. As of 12:32 p.m. ET, the stock was still down 2.7%.

The catalyst that sent the tech giant lower was troubling reports involving collisions within the company’s Waymo self-driving car unit.

Talk about déjà vu

Reports emerged late yesterday that Waymo was forced to recall the software that controls its self-driving cars. The company noted that all the cars in its current fleet had been updated, but the cause of the recall was equal parts humorous and troubling.

Waymo filed a voluntary recall report with the National Highway Traffic Safety Administration for software that had previously powered its fleet. The company cited two separate “incidents” that occurred in Phoenix, Arizona, on Dec. 11.

It seems that a Waymo self-driving car “made contact” (read “crashed”) with a pickup truck that was being hauled by a tow truck. The company notes that the truck was being “improperly towed,” which caused it to consistently veer between lanes of traffic. Following the collision, the tow truck driver failed to stop, and another Waymo vehicle crashed into the pickup just moments later.

The company was quick to note that neither Waymo vehicle had passengers at the time, resulting in no injuries and only “minor vehicle damage.”

Not ready for prime time

Self-driving cars have been making headlines in recent months — and not in a good way. Earlier this month, a Waymo vehicle had a collision with a cyclist in San Francisco, who suffered only minor injuries. A week later, a crowd surrounded and set fire to a Waymo vehicle in the same city — presumably in response to the earlier incident, though the matter is still under investigation.

This all comes just months after General Motors recalled all 950 of its Cruise robotaxis. A pedestrian, who was the victim of a hit-and-run accident, had been catapulted into an adjacent lane where they were struck by a Cruise self-driving car and dragged after the vehicle wasn’t able to stop.

Self-driving cars don’t move the needle for Alphabet, but some investors believe the technology has the potential to be a significant growth driver in the future.

There are plenty of reasons to buy Alphabet stock, but it’s clear self-driving isn’t yet ready for prime time.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 12, 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.

Why Alphabet Stock Stumbled Thursday Morning was originally published by The Motley Fool

Source link

Related Articles

Back to top button