Uber's valuation reflects excessive fear of self-driving competition; its dominant network scale supports future profit and revenue growth.

The second trade I made this morning was $2,000 worth of Uber shares. Uber's stock is currently at $69, and it's experiencing a sharp decline in the market, like most companies. It's down 30% since the beginning of the year.

Uber's stock price has fallen to around $100. Not much has changed during that time. In fact, the only thing that has fundamentally changed for Uber is its stock price, which has dropped by 30%.

But even at $100 per share , Uber's stock wasn't overpriced. For example, Uber's stock is currently trading at a forward price-to-earnings ratio of 17. If you factor in certain insurance items, Uber's free cash flow yield is likely around 5 to 6%. These are very low multiples for a company.

This type of company is what really worries investors. It's priced with significant disruption risks. Uber isn't priced as a fast-growing, highly profitable, and scalable business. However, I think that's the reality.

So, obviously, these concerns about the growth of self-driving vehicles are creating uncertainty for Uber, and that uncertainty is priced into the stock price. Therefore, investors today need to determine whether these concerns are accurately priced in, and whether Uber will experience genuine disruption or have its economics negatively impacted by these self-driving vehicles.

When I look at it, I don't think that will happen to the extent that the stock is currently priced in. I think Uber will grow. Uber continues to grow into a company with tremendous economic power thanks to its network, which provides enormous benefits.

And Uber's network is so much larger than its closest competitors that the difference is enormous .

For example, we can illustrate this visually here because the numbers don't reflect its true size. Uber is 595 times larger than Waymo based on the number of weekly trips it makes.

Waymo makes 500 A thousand trips, while Uber makes 297 million. That's a huge difference. Again, 500,000 trips versus 297 million . Yet Waymo doesn't seem to be catching up with Uber.

Uber is growing at a much faster pace than Waymo in terms of the number of trips. So, the gap in total trips between the two companies widens every quarter.

Now, of course, many of these self-driving car networks are still being established. It's safe to say they will capture a larger market share over time, and they will try . But even in areas where they've been operating for years, like San Francisco, Uber is still profitable and even growing .

This has been the case for Waymo from the beginning, as it developed its services perfectly in certain areas, and in certain cities, San Francisco being a prime example . In fact, Uber is a better fit for other cities.

Yet , even in areas less suited to Uber and more suited to self-driving taxis, Uber is still performing exceptionally well.

I can't predict the direction of the stock price, as circumstances can change suddenly. But I believe Uber will see profit growth. And its revenue over time, and I think it will grow at a relatively rapid pace.

At this valuation, I think a large portion of the risk is already priced in.