Ride-hailing company Uber (UBER) will be a stock to keep an eye on as the Tesla robotaxi event unfolds tomorrow. So far, analysts are optimistic about Uber’s role in the expanding autonomous vehicle (AV) industry. There’s a belief that Uber will play a significant part as AVs become more common due to its established network and recent partnerships with AV companies Waymo, Cruise, and WeRide. Bank of America sees Uber benefiting from the competitive AV market, as companies racing to improve their tech could leverage Uber’s platform.
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Recent collaborations with Waymo, Cruise, and WeRide show that Uber is in a strong position and demonstrates just how intense competition in the space is, which could make its network even more valuable.
The big opportunity for Uber lies in the vast potential of the AV market, which could have several winners. Analysts think Uber’s approach, partnering with multiple AV players, will be effective in staying competitive with Tesla on both cost and capability. The Tesla event might also suggest that full autonomy is still a few years off, which would make a hybrid model more favorable in the foreseeable future.
Autonomous Ridesharing Market a Big Opportunity for First Movers
According to Global Market Insights, the autonomous ridesharing market is expected to grow at a compound annual growth rate of 64% from 2023 to 2032 and reach a total value of $66 billion. Given the technological challenges required to develop AVs, along with the massive startup capital, it is an industry with high barriers to entry. This means that first movers like Tesla and Uber will have significant advantages once they get a hold of the market, which will undoubtedly help with their bottom lines in the long run.
Is UBER a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UBER stock based on 30 Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 66% rally in its share price over the past year, the average UBER price target of $89.31 per share implies 15.13% upside potential.
