Analyst Explains Why Uber Technologies (UBER) Stock Can Grow More Despite 50% Year-to-Date Gains

Uber Technologies, Inc. (NYSE:UBER) is one of the 10 Stocks to Watch in July as AI Enthusiasm Returns. Mark Mahaney, Evercore ISI head of internet research, explained in a recent program on CNBC that Uber Technologies (NYSE:UBER) needs to expand in more geographies for growth via partnerships

“If you get more of these rollouts with Waymo, and you get other AV companies—there’s more than just, you know, it’s not just Waymo’s world and it’s not just Tesla’s world. And by the way, of those two, Waymo is dramatically better in terms of what they’ve been able to show and roll out so far. But if you get Zoox in the market, and then you get a couple of Chinese players—not in the US but in parts of the Middle East, maybe in Europe—and if you get more companies like Mobileye, Mobilewave, if you get these companies out there showing that you can get multiple AV vendors, maybe not two or three but maybe four, five, or six, that's better for Uber’s economics.”

The analyst thinks there’s still more room for Uber Technologies (NYSE:UBER) stock to grow:

“I think there’s a lot more room for Uber stock. I know it’s up 50% year to date, but this thing trades at like 18–19 times free cash flow. It should trade at 25 times free cash flow. They're growing their free cash flow 25% to 30%.”

Hinde Group stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its Q1 2025 investor letter:

“With operations in more than 10,000 cities across 72 countries and gross bookings expected to exceed $180 billion this year, Uber Technologies, Inc. (NYSE:UBER) is one of the largest transportation network companies in the world. Each month, Uber helps more than 170 million users meet their mobility and delivery needs by connecting them with more than 7 million independent drivers and couriers. Uber’s mobility and delivery services are enabled by a highly sophisticated and efficient technology platform that automatically manages and optimizes demand prediction, matching & dispatching, routing, pricing, and personalization, among other functions. Uber has a leading category position in eight of its top ten mobility and delivery markets.

Like Interactive Brokers, Uber has no material, direct exposure to Trump’s tariffs or the associated retaliatory tariffs. Major components of Uber’s cost structure include insurance, credit card processing fees, data center and communications expenses, employee compensation, advertising expenses and rent. Tariffs only directly impact Uber’s cost structure in minor ways. Uber may have to pay more for computers and data center equipment, but the impact will be insignificant in the context of the company’s overall cost structure and will phase in gradually over time…” (Click here to read the full text)

While we acknowledge the potential of UBER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.