Smart Money Is Buying Uber (UBER) — Should You?

Bill Ackman just made a $2 billion bet on Uber (NYSE: UBER) … and he’s not alone. 

As AI-driven hype shifts between different corners of the market, ride-sharing and mobility stocks have become one of the most underappreciated growth areas—and some of the savviest investors are taking notice.

Uber has been quietly expanding its moat beyond just ridesharing and food delivery. 

With aggressive moves into autonomous vehicles (AVs) and advertising, the company is positioning itself for its next big growth phase. Here’s what’s going on with Uber, and why our Zen Ratings system currently ranks the stock a B, or Buy.

Why Ackman Is Buying Uber Now

Ackman’s investment in Uber is a long-term play on two key trends:

The Future Of Autonomous Vehicles (AVs)

• Uber isn’t building its own robotaxis, but it doesn’t need to. Instead, it’s partnering with companies like Waymo to integrate AVs into its platform. This allows Uber to capture the upside of AVs without the massive capital expenditure risks that come with developing self-driving technology in-house.
• The Waymo partnership started in Phoenix and is expanding to Austin and Atlanta in 2025, with more cities likely to follow.

Source: Waymo

A Massive Advertising Opportunity

• Uber’s ad business is on track to hit $1 billion+ in revenue this year, with a $5 billion potential by 2027.
• With 171 million monthly active users, Uber has data that rivals companies like Amazon, allowing it to sell high-value, targeted ads based on user travel and purchase habits.
• This could supercharge profitability in a way that most investors aren’t yet pricing in.

Robotaxi Competition: Real Risk Or Overblown Fear?

One of the biggest concerns surrounding Uber is the potential disruption from Tesla’s (NASDAQ: TSLA) robotaxis and companies like Waymo. 

But this fear may be overstated for a few reasons:

Scaling Robotaxis is Harder Than It Looks: Waymo has been working on self-driving taxis for over a decade, and it’s still only operational in a handful of cities. Even Tesla’s promised “robotaxi revolution” remains theoretical … They’re just now hoping to pilot the program in Texas this year. 

Uber is Already Partnering With AV Leaders: Instead of competing head-on, Uber is positioning itself as the go-to platform for booking autonomous rides via the partnership with Waymo, ensuring it benefits no matter which AV company wins.

Regulatory and Infrastructure Challenges: Even if Tesla or Waymo perfected robotaxis tomorrow, getting widespread regulatory approval and infrastructure support is another battle entirely.

Uber’s Valuation: Still Cheap Compared to Growth Potential

Uber has been a cash flow machine, with free cash flow surging 122% in Q4. 

Yet, despite its strong performance, the stock trades at just 23x free cash flow, well below its historical average of 32x.

Click here to see UBER fundamentals.

For a company that:

• Dominates ride-sharing globally
• Is expanding into AVs without the risk of building them
• Has a rapidly growing high-margin ad business

…it’s clear why smart money is buying in.

That said, Uber still scores just a C in Value according to our Zen Component Grades. 

Where UBER really excels is in its Financials, where the company is A rated because of its balance sheet strength and other key financial stability indicators. By the way: we believe strong financials are one of the biggest indicators of future exciting stock gains … here’s why.

See how UBER scores across our other Component Grades here.

Bottom Line: Uber Is More Than Just A Rideshare App

Uber is quietly evolving into a mobility, data, and advertising powerhouse. With Ackman putting $2 billion behind the stock and key business segments firing on all cylinders, the next phase of growth may be just getting started.

If robotaxi fears keep the stock cheap? That could be an opportunity, not a threat.

Click here to add UBER to your watchlist.

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