Looks like Uber (UBER) got caught in a hit-and-run.
The ride-sharing company's stock got rear-ended by investors on May 29 following a Wedbush report warning about competition from electric-vehicle maker Tesla's (TSLA) very long-awaited robotaxi, which is tentatively set for June 12.
Tesla CEO Elon Musk, who has been promising to deliver the robotaxi for over a decade, gave the world update on the project's status in a May 29 post on X, formerly Twitter, the social media site he bought for $44 billion.
"For the past several days, Tesla has been testing self-driving Model Y cars (no one in driver’s seat) on Austin public streets with no incidents," he wrote. "A month ahead of schedule. Next month, first self-delivery from factory to customer."
Wedbush, which has a neutral rating and $85 price target on Uber, believes the Tesla robotaxi serves as a long-term threat to Uber's business model, according to The Fly.
While management has executed well across mobility and delivery initiatives, the firm said, the lack of fresh catalysts coupled with shares trading at a premium to peers leaves limited upside if demand softens.
Uber no stranger to autonomous vehicles
The report left tread marks all over Uber's stock, with shares sliding 5.8% at last check.
Other investment firms had a different view of the subject.
BMO Capital said that Uber's underperformance in light of the announced robotaxi launch date was expected.
The firm believes shares are oversold at current levels, given Uber continues to expand internationally with the purchase of Denmark's largest taxi company, Dantaxi; continued positive trends for AV adoption in Austin; and ongoing innovation for both Mobility and Eats.
BMO reiterated an outperform rating on "Top Pick" Uber, with a price target of $101.
On May 23, Tigress Financial analyst Ivan Feinseth raised the firm's price target on Uber to $110 from $103 and affirmed a buy rating on the shares.
Uber continues to benefit from strong ridership and delivery demand, ongoing innovation, and partnerships to drive substantial growth, the analyst said.
Feinseth said he believes that autonomous vehicle opportunities will be a significant long-term upside catalyst.
Uber is certainly no stranger to autonomous vehicles. In September, the company announced an expansion of its partnership with Alphabet's (GOOGL) Waymo to include Austin and Atlanta. Uber has been offering rides via Waymo in Phoenix since 2023.
"Obviously, Waymo has a safety track record second to none. Consumers are loving the product," Uber CEO Dara Khosrowshahi said during the company's first-quarter earnings call in April.
Uber CEO Dara Khosrowshahi said he loved to work with Tesla.Joe Raedle/Getty Images
Uber CEO would love to work with Tesla
"The team on the ground is doing a terrific job in terms of repairs and cleaning and recharging the cars, etcetera, to make sure that the Waymo’s are available for rides," he said.
Uber also has a partnership with Chinese autonomous vehicle company WeRide. On May 5, Uber said it would expand to 15 cities over the next five years, including some in Europe as well as the United States.
The announcement came five months after Uber's first collaboration with WeRide, where the companies launched a robotaxi service in Abu Dhabi, Uber's first international offering.
Khosrowshahi said last month that Uber would "love to work with" Musk's company, according to Business Insider, and revealed that he owns a Tesla.
"Great car," Khosrowshahi said.
Asked if he has tried full self-driving, Khosrowshahi responded, "It is delightful, but I have to take over every once in a while. It is an absolutely great product. Again, the car is a terrific car."
Musk has been dismissive of Waymo's technology, telling analysts last month that the issue with the company's cars "is it costs way more money."
"The car is very expensive, made in low volume," he said during the company's earnings call. "Teslas are probably cost 25% or 20% of what a Waymo costs and made in very high volume."
However, Forbes Senior Editor Alan Ohnsman said Tesla's robotaxi "looks like a disaster waiting to happen."
"Sometimes products launch when they're ready and sometimes products launch because someone just wants to put it out," he said. "In this case there is absolutely objectively no evidence that Tesla is ready for this step."
Ohnsman said Musk believes that cost is the primary target for the robotaxi, adding that "your iPhone has a better camera than what Tesla is putting on its car and your iPhone is not driving in the street and doesn't risk killing people."
"I know many experts who research autonomous vehicle tech and are very concerned about this," he said. "Trying to be very low cost out of the gate for a technology you have not yet mastered doesn't really seem like the best idea, but that's where we are with what Tesla is doing."
Tesla did not immediately respond to a request for comment.
