Uber Technologies (UBER) stock plunged nearly 6% Wednesday after General Motors (GM) announced it is exiting Cruise robotaxi development in order to refocus the unit on advancing its autonomous and assisted driving capabilities, but shares are almost 2% higher today. Uber and Cruise had formed a partnership earlier this year that would have brought Cruise vehicles to the ride-hailing firm's platform.
"In many ways this announcement highlights the economic challenges of scaling a robotaxi network and the role rideshare platforms can play as autonomous vehicles attempt to commercialize (a bullish indicator), but we think the more tangible impact right now is on the partnership ecosystem given Waymo is already scaling despite the costs and Tesla (TSLA) has ambitions to do so as well," wrote Bernstein analyst Daniel Röska in a December 10 note.
While Tesla can be seen as a direct threat to Uber in the robotaxi arena, Uber and Waymo are collaborating in cities like Phoenix, Austin and Atlanta, where Uber manages the fleet and operations of Waymo vehicles, including maintenance and charging.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, Waymo does not use Uber in other cities like San Francisco and recently announced its expansion to Miami in partnership with Moove.
"The plan is the next phase of Waymo's experimentation with various business models before committing to a long-term strategy," wrote Jefferies analyst John Colantuoni in a December 6 note.
Regarding Tesla, Uber remains optimistic about a potential robotaxi partnership. Uber CEO Dara Khosrowshahi told the Financial Times in October that he would "love" to have Tesla's Cybercab robotaxi on the Uber platform, according to Teslarati. But even if that doesn't happen, "I don't think this is going to be a winner-take-all marketplace," Khosrowshahi said. "We believe in the spirit of partnership; we'll see what Tesla does."
Is Uber Technologies stock a buy, sell or hold?
Uber Technologies has struggled on the price charts this year and is up just 1.5% since the start of 2024. Still, Wall Street is bullish on the large-cap stock.
According to S&P Global Market Intelligence, the average analyst target price for UBER stock is $90.05, representing implied upside of 45% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Jefferies is one of the more bullish outfits on UBER stock with a Buy rating and $100 price target. Colantuoni said the firm remains bullish on Uber due to its leading free cash flow growth and growing stock buybacks, among other reasons.
Related Content
-
Is Your Social Security Earnings Record Wrong? Here's How to Fix ItYour Social Security benefits are based on your Social Security earnings record. It's important to review your records to avoid having your benefits reduced.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Stock Market Today: Markets Discount Another U.S. Downgrade
After Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
