As rival Lyft continues its slide, Uber Technologies has restarted its engines, topping Q1 estimates and partnering with Amazon.com, Oracle and Alphabet via its Google Cloud business. With a spot on the IBD 50 and IBD Leaderboard, Uber stock has also revved up a new buy zone.
Both Lyft and Uber launched their IPOs in 2019. While Lyft stock soon stalled out and has yet to recover, Uber stock has found traction and is showing renewed power. Its relative strength line is right around a new 52-week high.
Earlier this year, Uber inked deals with Oracle and Google Cloud, adding a tie-in with Amazon to expand the reach of its Uber Eats delivery business.
Leading institutional investors have taken note, with 29 funds scoring an A+ rating from IBD owning shares in Uber stock. Underscoring demand for the ride-hailing pioneer, Uber sports a B Accumulation/Distribution Rating, a 1.2 up/down volume ratio and three quarters of rising fund ownership.
Uber Stock: Going All In With Oracle, Google Cloud
In February, Uber announced it plans to go fully into the cloud, signing seven-year contracts with both Oracle and Google Cloud. Uber expects the agreements to reduce costs and refocus its engineering efforts. The company expects the 100% transition to the cloud to take a few years.
Since its founding in 2009, Uber has been an outlier in the tech world by relying on its own servers rather than embracing the cloud. All three companies declined to reveal the value of the deals.
As part of the deal with Oracle, Uber will integrate its Uber Freight business into an array of Oracle's cloud-based enterprise platforms.
As the Wall Street Journal reported, the arrangement between Uber and Google Cloud also entails tapping into Google's mapping services and advertising products.
Alexa, I'm Hungry. Where's My Uber Eats Order?
On May 4, Uber announced that hungry customers can now use their Amazon Echo devices to track the status of the Uber Eats orders in the U.S. The new integration enables real-time, hands-free order tracking for Echo users across the country.
The Uber Eats-Alexa combo powers timely updates at various stages of an order, such as when the orders is being prepared or when the driver has pulled up with the food.
Amazon is Uber's third partner in the voice-activated space. It also has partnerships with Google Assistant and voice-ordering integration with Siri from Apple.
Uber Beats, But Profits Remain Bumpy
As Uber continues to disrupt the mobility, delivery and freight businesses, the company has not yet mapped out a road to consistent profitability on an annual basis. Uber did post a profit of 59 cents a share in 2018, but then lost $5.04 a share and $3.86 a share in the next two years.
But in Q1, Uber beat earnings and revenue estimates. The company reported a loss of 8 cents a share on revenue of $8.8 billion. But that topped Wall Street expectations of $8.7 billion and was better than the loss of 9 cents a share analysts had forecast.
While Wall Street sees Uber posting a loss this year, analysts expects a 146% EPS gain in 2024.
Uber Stock Motors Into Buy Zone
After delivering a better-than-expected Q1, Uber stock soared past a trendline entry near 32. Volume before and after earnings spiked far above average, a clear indication of demand.
The stock has also now cleared a 37.68 buy point in a cup pattern and remains in a buy zone.
Uber partner Google stock, featured in last week's IBD Stock Analysis, has also vaulted and is now extended. Oracle stock continues to hold and add to its gains following a breakout in March.
Amazon stock also keeps riding a rebound as its 10-week moving average starts to curl back above its longer-term 40-week line.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
