Tesla (TSLA) stock is sliding following its robotaxi event, which failed to impress investors with its Cybercab offering. This has sent other rideshare stocks like Uber (UBER) and Lyft (LYFT) higher on Friday. Roth MKM managing director Rohit Kulkarni joins Catalysts to discuss the rideshare sector.

Kulkarni notes that the anticipation for Tesla's event was "an overhang" on Uber and Lyft stocks. He explains that the main investor question has been: If Tesla emerges as the preferred rideshare option, what happens to Uber and Lyft? This concern has grown "louder and louder over the last 3-6 months." However, based on the outcome of Thursday's robotaxi event, Kulkarni says it was "a big, big relief" for these companies because the event demonstrated that "creating a scalable robotaxi business is not easy." He notes it will take extensive time and resources, while Uber and Lyft continue to gain market share.

"Tesla as a big, big player or potential big player is now off the table. That's the relief rally that you're seeing in Uber and Lyft," he states, adding that the next significant catalyst for these companies would likely come from advertising and subscription growth.

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This post was written by Angel Smith