Former Australia captain Waugh was impressed with the no-nonsense way his country defeated minnows Afghanistan by seven wickets in their opening match on Saturday.
But the 54-year-old believes the West Indies will provide a much sterner test when they meet at Trent Bridge on Thursday.
Led by flamboyant opener Chris Gayle, who thumped 50 runs off 34 balls, the West Indies wasted little time polishing off Pakistan by seven wickets after bowling them out for 105 in their first match.
It was an impressive show of strength from the two-time champions and Waugh is intrigued to see how Australia fare against one of the tournament's most talented but unpredictable teams.
"The West Indies will provide a more realistic gauge on how the team is tracking, for they possess a squad full of matchwinners that can dominate if they gain any sense of ascendency in a match," Waugh wrote in a column on the International Cricket Council's media page.
"They are the most watchable team in the tournament with a batting line-up that can kidnap any bowling attack with brute force. No ground is big enough when this behemoth of a batting order clicks into overdrive but they also have a vulnerability against high-quality bowling as they tend to play one dimensional at times."
Andre Russell, Sheldon Cottrell, Oshane Thomas and Jason Holder proved too hot for Pakistan to handle and Waugh said: "For the first time in a long while they have fast-bowling depth. Every side in this tournament will be wary of playing the Windies and I wouldn't want to face them in a knockout match. They are the sort of team that, if they get on a roll and build some momentum, then they could win it all."