The Uber logo is seen in the rain in Krakow, Poland, on January 6, 2024.
Klaudia Radecka Nurphoto | Getty Images
Tesla‘s hyped robotaxi launch posed a threat UberIt has plans to share rides, but it has become a benefit for the stock.
Uber shares fell early investor excitement leading up to Thursday’s event — it had fallen mainly in early August and mid-September — but was up more than 9% on Friday. renewed enthusiasm that the company is well positioned to advance autonomous vehicle offerings. The move pushed the stock to a 52-week high and led the S&P 500 higher on the session.
Uber stock’s turnaround is incredible, now up nearly 22% in the past month and around 38% for the year. Lyftanother major player, is also up about 10% on Friday. In comparison, Tesla shares are taking a dive in Friday’s trading session and are down more than 11% this year, underperforming the S&P 500 and Nasdaq, which have gained about 22% this year.
Uber has year-to-date shares
The buzz surrounding Tesla’s long-awaited Cybercab has largely died down lack of detail In addition to offering no insight into the latest advancements in full-auto-driving technology and the company’s strategy or economics of its ride-sharing service, among other expectations investors had.
“TSLA’s toothless taxi is the best case for UBER,” Jefferies analyst John Colantuoni said in a note on Friday, noting that the electric car maker had given ambitious targets but little indication of feasibility.
“TSLA did not provide verifiable evidence of progress towards autonomous L3 technology, which makes it difficult to assess the feasibility of the goals set out in the event, as there is no precedent for achieving higher levels of autonomy using a visual approach (instead of a sensor-fusion approach),” he said. said Colantuoni. “We believe this helps minimize the ongoing overlap of UBER stock from TSLA’s ambitions in the robotaxi space.”
Analysts at Jefferies maintained their buy rating and $100 price target, which suggests a 28% upside from Thursday’s close.
According to Colantuoni, the existence of robotaxis could ultimately expand Uber’s entire viable market, as increased supply would drive lower-priced autonomous vehicle offerings over time, ultimately expanding ride-sharing use cases. Today, Uber is the largest ride-sharing company in the world.
“We believe that AV developers will ultimately choose to partner with ride-sharing players instead of looking for autonomous fleets. We also see UBER as well-positioned in the ride-sharing space to support AV developers” driving sustainable growth by optimizing logistics, providing fleet management expertise and assisting with navigation. local regulations, among other benefits, said the Jefferies analyst.
While Tesla appears committed to developing its own robotaxi fleet without partnering with existing ride-sharing platforms, Colantuoni expects it will eventually have to explore that option.
Tesla “potentially underestimates the hurdles to scaling a robotaxi fleet” and may struggle to scale its fleet operations without offering on-demand access through Uber and Lyft, he said.
New Tesla Cybertruck vehicles parked at a logistics drop zone in Seattle, Washington, on August 22, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Bank of America analyst Justin Post sees Tesla as a positive development for Uber, reiterating a buy rating on the stock on Friday. In the longer term, the analyst said, the competition between Tesla is increasing, Google’s Waymo and several other AV competitors in California could benefit from Uber, given its potential to partner with multiple AV providers. He also speculated that Tesla’s cybercab owners might one day put their cars on a ride-sharing network like Uber or Lyft.
“While investors see little change in Tesla’s long-term competition potential (5+ years), we knew a CyberCab prototype was coming and the event lasted only 19 minutes, with less detail and specific timelines than expected for Uber,” he said. a note to customers
Bernstein’s Toni Sacconaghi also found the Tesla event to be “lackluster and surprising,” adding to the case for other major AV players.
Sacconaghi reiterated his assessment of Uber and Lyft’s market performance, saying ride-sharing platforms could benefit from partnerships with AV manufacturers and, over time, add value to those operating fixed fleets.
Shares of Lyft are down nearly 9% year to date, and less than a third of analysts rate it a buy. Its average price target suggests a potential upside of about 6%, according to FactSet.
