If you can’t beat them, join them.
That, it seems, is a key part of the strategy for Uber Technologies (UBER) as the company faces a burgeoning roster of competitors in the autonomous vehicle (AV) taxi space.
Despite the specter of competition from the likes of Tesla (TSLA), GM (GM), and new entrant Amazon (AMZN), Uber’s stock price has soared more than 60% from the start of this year to a new all-time high. This comes at a time when the ridesharing giant is joining forces with others in the AV space.
Investors are apparently pleased.
Case in point: On Monday, Alphabet’s (GOOG) Waymo, partnered with Uber since 2023 and considered by analysts to be one of Uber’s most crucial partners, announced an expansion into Philadelphia. Uber’s stock traded up on the news. The following day, Bank of America (BAC) increased its price target for Uber from $97 to $115.
“[Uber] is 100% focused on the partnership model,” Bank of America analyst Justin Post told Yahoo Finance. “That seems to be part of the multiple expansions for the stock.”
The stock price has also been buoyed by several recent developments that have helped the company keep up positive momentum throughout the first half of the year.
Fundamentals suggest that Uber’s popularity is continuing to grow. Bloomberg Second Measure data, which tracks consumer purchases, indicates that bookings accelerated by some 1.4% in the second quarter compared to Q1. Growth in Uber’s overall “Mobility” division, which covers ride-hailing, and its “Delivery” division accelerated by 1.5% and 0.9%, respectively.
The average price users are paying per ride was also up, approximately 8.4% in Q2, compared to the same quarter last year, according to the Bloomberg data.
One potential wrinkle: Uber is currently facing a lawsuit from the US Federal Trade Commission, which alleges that the company engaged in deceptive billing practices including charging users for its Uber One subscription without their consent.
The passage of President Trump’s “One Big Beautiful Bill” legislation package may also provide a boost to Uber. Given that the “no tax on tips” provision in the bill applies to independent contractors as well as employees, Bank of America analysts predicted in a recent research note that drivers at ridesharing companies like Uber and Lyft (LYFT) could see as much as a 2.5% increase in their pay.
“It does make working for Uber a little bit more financially attractive,” Post said, “and if that’s the case, you have better driver supply and that’s good for Uber’s quality of service levels.”
Uber is also likely to benefit from a deal made by one of its partners, according to the Bank of America note. Nigerian startup AV fleet manager Moove, which is backed by Uber and which Bank of America described as “one of Uber’s most critical fleet management partners,” is set to raise $1.2 billion to finance the deployment of an AV fleet in partnership with Waymo, according to Bloomberg.
It’s unclear how exactly those vehicles might be deployed in concert with Uber’s current offerings, but the news that Uber is looking to increase its partnership with Waymo, which has already seen expansions in Austin and Atlanta, has been well-received by the market.
“It’s a lot of individual markets right now that people are extrapolating to bigger picture, but you want to have Uber have success with their AV partners,” Post said. “That’s what’s key for the next six to 12 months.”
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance.
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