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
-
Inherited a House? Here's How to Decide What to Do With ItWhen you inherit a property, the decision to keep, rent, or sell can feel overwhelming, especially when emotions are involved. Here's what you need to consider.
-
I own 2 homes, but have 3 kids. Can my estate plan make it fair?We ask estate planning attorneys for guidance.
-
I'm a Financial Planner: Here Are Some Long-Term Care Insurance Tips for Every AgeStrategies include adding riders to life insurance for younger individuals and considering hybrid or traditional long-term care policies for those in their mid-50s and 60s.
-
Engineering Reliable Retirement Income in 2025: An Expert GuideFor dependable income, consider using a bucket strategy and annuities in tandem to promote structure, flexibility and peace of mind.
-
Crazy Markets Shouldn't Derail Your Retirement if You Follow This Financial Pro's PlanBeing nervous about retiring in a volatile market is a red flag that you're relying too heavily on your investment portfolio, rather than a comprehensive plan.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff NoiseMarkets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Dividend Increases: 7 Stocks With Rising PayoutsWhile dividend growth has been slowing, certain stocks have raised their dividend payouts. These are some selections.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to SkipA business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
