Uber Technologies is the IBD Stock Of The Day for Thursday. Shares of the ride-hailing and delivery company have formed a double-bottom base and are finding support at their 21-day moving average line.
On the stock market today, Uber stock slipped 0.4% to close at 71.25. Shares have gained nearly 16% so far this year and 54% in the past 12 months.
Uber is coming off a second quarter report that beat expectations for sales and earnings. It also announced in recent weeks a pair of partnerships to power its ambitions to offer more autonomous vehicles to riders on its app. Investors are watching closely for how Uber balances its current earnings growth with its AV ambitions. Meanwhile, tech giant Tesla's robotaxi vision looms large in the background.
Uber Stock: Partnering Up For AVs
Last year was a big one for Uber, with its flip to profitability powering a nearly 150% gain. The company started strong in 2024, too, with approval of the firm's first-ever stock buyback pushing Uber to all-time highs in February.
But the debate around Uber stock since then has focused less on results and more on its positioning in the race to offer autonomous vehicles. Uber stock suffered as investors fretted over Elon Musk's vision to launch a Tesla robotaxi service.
Tesla is hosting an event next month to further detail its plans. The event was initially scheduled for August but Tesla pushed it back.
Analysts bullish on Uber see any threat from Tesla as a distant one. Nevertheless, Uber has steadily defined its own autonomous vision.
Uber offloaded its self-driving car research division in 2020 as part of broader cost cuts under Chief Executive Dara Khosrowshahi. Since then, it has positioned itself as a partner to companies making self-driving vehicles.
"Uber can provide enormous demand without AV players needing to invest capital towards acquiring customers or building the marketplace tech that delivers reliability at the standard that consumers have come to expect," Khosrowshahi said on the company's most recent earnings call.
Uber last month announced a partnership with the General Motors-backed AV company Cruise that will allow Uber riders to hail AVs in undisclosed markets starting next year. Meanwhile, Uber also struck a partnership last year to offer cars from Google's self-driving company Waymo in Phoenix.
Last week, Uber announced a strategic partnership with the startup Wayve, which makes AI-powered software for autonomous vehicles.
Uber Gains Following Q2 Beat
In a client note last Friday, Loop Capital analyst Rob Sanderson said he expects "investor focus around the robotaxi debate will cool down after the Tesla event."
In the meantime, Uber "maintains the leading position in global ride-share, is proving synergies in its delivery business, and management continues to deliver solid execution with its strong hand," Sanderson wrote. He rates Uber stock a buy.
It helps that Uber is coming off a strong quarter. Uber stock gained 11% on Aug. 6, after it published Q2 results that beat expectations. Uber earned 47 cents per share on sales of $10.7 billion. The 16% year-over-year sales growth marked its fastest rate in five quarters.
Gross bookings for Uber's ride-hailing and delivery businesses grew 19% year over year to $40 billion, just ahead of analyst forecasts of $39.6 billion.
Despite some concerns about the broader economy, Khosrowshahi told analysts that the "Uber consumer has never been stronger."
Uber Stock Technical Ratings
Boosted by its Q2 results, Uber stock's Relative Strength Rating has climbed to 84 out of 99. That indicates Uber has outperformed 84% of stocks tracked by IBD over the past 12 months. The relative strength line has bounced back from Uber's slump this spring, though it is still below highs from the start of the year.
Meanwhile, Uber stock holds an IBD Composite Rating of 70 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one. The best growth stocks typically have a Composite Rating of 90 or better.
