As the allure of artificial intelligence (AI) stocks remains hard to ignore, an analyst picking Uber (UBER) as his top bet for 2025 over chip giant Nvidia (NVDA) stands out.
However, that is exactly what Mark Mahaney from Evercore ISI recently said: “I think [Uber is] still a very high-quality asset, the world leader, global leader in terms of market share in both delivery and mobility, with an ads business that’s building up.”
Mahaney's assertions find support when we compare the upside potential of the two stocks, where Uber trumps Nvidia.
About Uber Stock
Before we dive into what makes Uber a potential top bet for investors in 2025, let’s take a quick glance at its operations.
Founded in 2009 and based out of San Francisco, Uber operates as a global platform offering ride-hailing, food delivery (Uber Eats), and shipping and carrier services (Uber Freight), and it is also developing autonomous vehicles. The company was added to the benchmark S&P 500 Index ($SPX) just over a year ago and currently carries a market capitalization of $136.8 billion.
UBER stock is up 7.7% on a year-to-date basis and 10% over the past 52 weeks.
Uber Boasts Steady Financials
Uber stock stumbled after its third-quarter earnings report, as investors zeroed in on slower-than-expected growth in gross bookings. Otherwise, Uber’s numbers for the latest quarter came in ahead of Wall Street’s estimates. Revenues of $11.2 billion were up 20% year-over-year, while earnings of $1.20 per share marked a quantum leap from the year-ago figure of $0.10, and easily outpaced the consensus estimate of $0.38.
Gross bookings clocked in at $41 billion, rising 16% from the previous year. Further, trips during the quarter grew 17% to 2.9 billion, or about 31 million trips per day on average. Further, given that Uber has demonstrated an ability to increase prices above inflation in recent years, it’s reasonable to assume the company can maintain trip fare growth at least in line with inflation going forward.
Net cash from operating activities and free cash flow were at $966 million and $905 million, respectively. Overall, Uber exited the quarter with a healthy cash balance of $6.2 billion, much higher than its short-term debt levels of $178 million.
Moat and Other Advantages
Uber’s competitive advantage lies in its unique ability to provide both mobility and delivery services, supported by a vast and difficult-to-replicate urban mobility database. This database enables Uber to optimize routes, pricing, and the connection between users and drivers, or, in the future, self-driving service providers like Waymo and Tesla (TSLA). The company also leverages customer loyalty through subscription plans, rewards programs, and its well-established reputation as a reliable and safe platform.
Uber’s strategic investments in companies such as Careem, Grab (GRAB), and Didi (DIDIY) further strengthen its global presence. With over 160 million consumers using its platform, Uber is well-positioned to introduce additional services and expand its offerings. This extensive user base provides a foundation for scaling related products and services seamlessly.
Meanwhile, in the autonomous vehicle sector, Uber is advancing through partnerships with leading companies, remaining cognizant of the threat from robotaxis. For example, it has collaborated with WeRide in the UAE and Waymo in the U.S., making Waymo’s autonomous vehicles available through Uber’s app in cities like Austin and Atlanta. The company is integrating autonomous delivery robots through its partnership with Avride, with pilot programs already launched in Austin, Dallas, and Jersey City.
Thus, with operations spanning over 70 countries and millions of active users and drivers, Uber’s global network is primed for autonomous vehicle integration. Its platform’s familiarity and existing infrastructure make it easier to adopt autonomous technology, giving Uber a head start in the race toward widespread AV deployment.
Beyond ride-hailing, Uber continues to grow its logistics and transportation segments. Delivery accounted for 30% of revenue in Q3, while its freight division generated over $1.3 billion, contributing 11% to total revenue. These numbers highlight the diversification of Uber’s revenue streams, solidifying its position as more than just a ride-hailing app.
Lastly, Uber One, the company’s subscription-based loyalty program, continues to see strong adoption. This program underscores the platform’s stickiness and economic moat, both of which are critical for ensuring long-term growth and customer retention.
What Do Analysts Think About Uber Stock?
Analysts have deemed UBER stock a “Strong Buy” with a mean target price of $92.02. This indicates upside potential of about 41.8% (Nvidia’s is at about 25%) from current levels. Out of 45 analysts covering the stock, 36 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, and 6 have a “Hold” rating.
