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
-
Investing Abroad Could Pay Off — Here's HowCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Retire in Belize for Stunning Natural Beauty and CultureBelize offers miles of protected land and ocean, a rich mix of cultures and a chill lifestyle. Best yet — the income requirement is just $2K per month.
-
Why Investing Abroad Could Pay Off
Countries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade TalksDespite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
