Market underestimates Uber's ability to turn self-driving into a platform opportunity; expects rebound to $80 range by year-end as a long-term bet.

This leads us to number four, which is the company "Uber" . I've talked about this stock several times recently because I think the market still misunderstands Uber's position in the self-driving space .

Every time we get news about self-driving taxis, Uber's stock is affected. It drops for a while, then recovers well. Then we get more news about self- driving taxis. The news comes out again, and Uber's stock drops .

It was a vicious cycle, but it's great for investors when you understand this cycle.

The argument of those pessimistic about Uber is that self-driving taxis will kill Uber. My question is, well, why is that? Uber does not necessarily need to build the best self-driving software in the world .

It needs passengers and vehicles. This is the essence of the market.

And now, Uber is going even further. Uber has partnered with companies such as Lucid and Nuru for a fleet of self- driving taxis designed specifically for the Uber platform. Uber has obtained a license for its self-driving system from Nuro, and Uber and its fleet partners will actually own and operate these vehicles.

Most importantly, Uber expanded its commitment to include at least 35,000 robot taxis from Lucid. Testing is already underway, and the San Francisco Bay Area is expected to be the first market to launch, with Houston planned for 2027.

It has also partnered with a number of other automakers such as Rivian, and even collaborated with companies like Nvidia, targeting a fleet of 100,000 self-driving vehicles in 28 cities by 2028.

That's why I think the idea that self-driving will automatically kill Uber is a very simplistic one. Uber could become a marketplace where third-party autonomous fleets find their passengers, and an operator and owner of autonomous fleets at the same time . This is a radically different thesis .

Another threat currently being considered against Uber is the recent launch of Meta's new AI agent, "Muse". It would be foolish to dismiss this as unimportant , but I don't think its impact is as significant as some people believe.

In the transportation sector, it's not like e-commerce where someone is looking to buy a specific product and wants the best price. In transportation, such as Uber, users search for and need a ride quickly and within a specific timeframe.

So, who has the largest fleet by a wide margin ? It's Uber . So, I see this as a benefit as well.

Returning to our analysis site, we can see that Uber's shares have fallen by 16% this year and currently enjoy a score of 73, which is a strong result. For this company, let's apply the discounted cash flow model, and assuming cash flow growth of only 11% per year over the next five years, that gives us an implied fair value of $82, which is 21% higher than today's price.

When we look at the analysts, we find that they are still optimistic about the stock, with an average 12-month price target of nearly $105 per share, which implies an upside of more than 50%.

But for me, looking towards the end of the year, I expect this stock to return to the $80 range by the end of the year. We have to wait and see. So, for October, the stock could certainly rebound, but for me this is a long-term bet.

I believe the market is still underestimating Uber's ability to transform self- driving vehicles from a threat into a platform opportunity.

Uber, the opportunity of a self-driving taxi platform.