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We came across a bullish thesis on Uber Technologies, Inc. (UBER) on High Growth Investing’s Substack by Stefan Waldhauser. In this article, we will summarize the bulls’ thesis on UBER. Uber Technologies, Inc. (UBER)'s share was trading at $65.97 as of Jan 10th. UBER’s trailing and forward P/E were 32.50 and 25.77 respectively according to Yahoo Finance.
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Uber’s performance in 2024 was notably weaker than expected, with its stock down by 2%—a stark contrast to its inclusion in the S&P 500. While its fundamental business numbers remained strong, the stock underperformed due to investor fears of potential disruption by competitors like Tesla and Waymo, particularly surrounding the rise of autonomous driving. This sentiment led to short-term dips in the stock whenever Elon Musk made headlines with his ambitious robotaxi plans. However, in a strategic move, Uber continued to position itself as a key player in the evolving mobility landscape, with positive developments emerging as 2025 began.
Uber’s announcement of a partnership with Nvidia to accelerate autonomous driving technology sent its stock up by 10% in the first two weeks of January 2025. The collaboration focuses on using Nvidia’s simulation environment to test autonomous vehicles more efficiently. While Uber had previously exited the autonomous vehicle development space in 2020 by selling its division to Aurora, this partnership signals that Uber’s role in autonomous driving will shift toward integrating third-party vehicles into its platform. This asset-light approach allows Uber to leverage leading technology without bearing the high costs and risks of developing its own vehicles. Uber’s vast transportation data could play a key role in enhancing Nvidia’s simulation tools, improving safety and scalability in autonomous driving.
In addition to this partnership, Uber has further bolstered its mobility ambitions by securing a multiyear exclusive deal with Delta Air Lines, offering SkyMiles members the chance to earn miles for Uber rides and Eats orders. This agreement, which ends Delta’s partnership with Lyft, enhances Uber’s competitive position in the travel and delivery sectors. Speculation suggests that this collaboration could be a precursor to deeper ties with Joby Aviation, Uber’s air mobility partner, aiming to integrate air taxis with Uber’s ground transportation network. Joby, which aims to launch air taxi services in major cities by 2025, stands to benefit from Uber’s substantial backing.
Another key development is Uber’s accelerated share buyback program, worth up to $7 billion. This move, motivated by the current undervaluation of its stock, will help mitigate shareholder dilution and boost investor confidence. Uber’s free cash flow is expected to grow significantly through 2025, making its stock an attractive investment.