Uber Traders Shrug Off Robotaxi Risks as Stock Powers to Record

Yahoo

08-07-2025

(Bloomberg) -- Uber Technologies Inc. investors are brushing aside potential threats from self-driving competition to bet that the company has plenty of room to expand in the near term.
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Uber shares have rallied 60% to a record this year as partnerships with robotaxi startups like Alphabet Inc.'s Waymo and growth in new markets have given bulls reasons to cheer after the stock underperformed in 2024. The advance has made Uber the seventh-best S&P 500 performer in 2025.
'They've done a great job expanding their addressable markets by adding things like grocery, convenience, alcohol,' said Jamie Meyers, senior equities analyst at Laffer Tengler Investments Inc.
Such moves, however, haven't fully assuaged concerns about long-term risks from robotaxi services like Waymo, which is operating independently in three cities — San Francisco, Phoenix and Los Angeles — and in partnership with Uber in Austin and Atlanta. Tesla Inc. is going it alone and began testing a similar offering in Austin last month.
Reports on Waymo and Tesla's robotaxi plans have triggered selloffs in shares of Uber and smaller rival Lyft Inc. in recent months.
'There's this view that's somewhat percolated across the investor base that regardless of what the competition looks like, they own the relationship with the consumer in terms of mobility,' said Matt Stucky, Northwestern Mutual Wealth Management's chief portfolio manager of equities. 'I would question that quite a bit just in terms of the path forward for the company.'
Uber didn't respond to a request for comment.
The San Francisco-based firm has for years been investing into new areas across its core ride-hailing and delivery businesses in the US and abroad, helping fuel revenue growth that's expected to be 15% in 2025. It has also entered into more than a dozen partnerships with car manufacturers and technology developers around the world.
David Wagner, portfolio manager at Aptus Capital Advisors, likes Uber's strategy of partnering with self-driving rivals and remains bullish, though he doesn't expect the stock to push much higher in the near term with few catalysts on the horizon.
'The market finally started to recognize that we'd rather take kind of this aggregator approach and reward that company,' he said.
Roughly three quarters of analysts tracked by Bloomberg that cover Uber have buy-equivalent ratings and the remainder are neutral. But the run-up in shares has the stock trading roughly in line with the average price target at about $98.
Canaccord analyst George Gianarikas acknowledges that Uber's strategy of embracing a variety of self-driving services may well prove to be successful, but sees the risks as too great to ignore.
'An alternative scenario is also plausible: a new world dominated by a few AV behemoths that control the value chain,' he wrote in a research note late last month. 'We remain flexible and are open to either outcome, but given the uncertainty and potential for rapid disruption, see neutral as the appropriate near-term rating.'
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--With assistance from Natalie Lung and Yoolim Lee.
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