Billionaires Pile Into AI Stock as Free Cash Flow Surges

Billionaire investors like David Tepper and Bill Ackman are piling into Uber Technologies (UBER), attracted by the ride-sharing giant's transformation into a free cash flow machine. Uber's stock has surged as the company's financial performance has improved, with profits reaching $9.86 billion in 2024 and free cash flow (FCF) growing to nearly $6.9 billion from $3.36 billion in 2023. The FCF margin also increased to 15.7%, indicating efficient operations and flexibility for further investment.

Uber's turnaround under CEO Dara Khosrowshahi has caught the attention of billionaire investors, who see the company's potential for growth and value creation. The company has shown significant improvement in its financials, with profits and FCF growing steadily. Additionally, Uber's total trips grew by 19% in 2024, demonstrating the company's ability to maintain and expand its customer base.

One of the key factors driving billionaire investors' interest in Uber is the company's attractive opportunity in autonomous vehicles (AV). Uber has positioned itself to navigate the challenges in the AV space, forging partnerships with companies like WayMo and WeRide. The company plans to start testing some of the AVs in its fleet soon, which could lead to significant growth and cost savings in the long run.

Uber's strong financial performance and growth prospects have led billionaire investors to pile into the stock, attracted by its undervalued valuation. Despite the company's strong fundamentals and bullish take on AVs, Uber's stock is still trading at a relatively low valuation of 24 times forward earnings. This presents an attractive entry point for investors.

In conclusion, Uber's transformation into a free cash flow machine has attracted the attention of billionaire investors like David Tepper and Bill Ackman. The company's strong financial performance, growth prospects, and attractive opportunity in autonomous vehicles have driven its stock price higher. As Uber continues to execute on its strategic direction and commercialize AV technology, investors can expect the company to maintain its momentum and create value for shareholders.