Is Uber's Recent Pullback a Strategic Entry Point for Long-Term Investors?

The recent volatility in Uber Technologies (UBER) has sparked debate among investors about whether the stock's pullback presents a compelling opportunity for long-term buyers. A combination of technical indicators, robust fundamental performance, and strategic advancements in autonomous vehicle (AV) partnerships suggests that UBER's current valuation may be undervalued, despite near-term risks. This analysis evaluates the interplay of technical and fundamental factors to determine whether the pullback aligns with a strategic entry point.

Technical Analysis: Oversold Conditions and Mixed Signals

Uber's technical indicators paint a nuanced picture. The 14-day Relative Strength Index (RSI) stands at 28.28, signaling oversold conditions and historically suggesting a potential rebound. This aligns with the stock's recent dip to $84.83, below its 50-day ($94.20) and 200-day ($86.94) moving averages, which generate bearish signals. However, the MACD value of -2.78 also suggests a buy, reflecting divergent momentum dynamics according to technical analysis.

Support and resistance levels further complicate the outlook. The stock is currently trading near a critical support level of $81.30, with resistance at $86.00 according to market analysis. A break above $86.00 could trigger a bullish trend, while a drop below $81.30 might accelerate downward movement. The recent 7.65% pre-market decline to $92.09 following Q3 earnings highlights the market's cautious sentiment, despite the company's strong financial results.

Fundamental Strength: Earnings Beat and Cash Flow Resilience

Uber's Q3 2025 earnings report underscores its operational resilience. The company reported a 20% year-over-year revenue increase to $13.5 billion, driven by 22% growth in trips to 3.5 billion and 21% growth in gross bookings to $49.7 billion. Adjusted EBITDA surged 33% YoY to $2.3 billion, while net income reached $6.6 billion, bolstered by a $4.9 billion tax valuation release. Free cash flow of $2.2 billion and $9.1 billion in unrestricted cash further reinforce financial flexibility according to financial reports.

Looking ahead, Uber's guidance for Q4 2025-$52.25 billion to $53.75 billion in gross bookings and $2.41 billion to $2.51 billion in adjusted EBITDA-suggests continued momentum according to earnings data. However, institutional ownership trends reveal mixed sentiment. While UBS AM increased its stake by 82%, Wellington Management and JENNISON Associates reduced holdings by 61.8% and 38.8%, respectively. This divergence highlights uncertainty about near-term execution risks but does not negate the company's long-term fundamentals.

Strategic AV Partnerships: A Catalyst for Long-Term Growth

Uber's AV strategy in 2025 has shifted from in-house development to strategic alliances, mitigating past risks and accelerating deployment. The company is collaborating with NVIDIA and Stellantis to deploy 5,000 Level 4 autonomous vehicles for robotaxi operations, leveraging NVIDIA's AI architecture and Stellantis' manufacturing scale. Additional partnerships with May Mobility, Baidu, and WeRide are expanding AV services into 15 new cities and global markets outside the U.S. and China.

These alliances are not merely speculative. Uber's integration of AI into pricing, route optimization, and safety has already improved profitability, with FY2024 net income surging 422% to $9.86 billion. The company's focus on AV commercialization-supported by third-party financing and reinvestment of free cash flow into infrastructure-positions it to capitalize on the long-term shift toward autonomous mobility according to industry analysis.

Risks and Regulatory Headwinds

Despite these positives, Uber faces significant challenges. Regulatory scrutiny over its gig economy model persists, with California's recent legislation allowing driver unionization potentially increasing labor costs. AV partnerships also carry risks, including high capital intensity and operational complexity, as evidenced by Uber's 2018 fatal AV accident and its subsequent sale of the Advanced Technologies Group to Aurora according to industry reports.

Moreover, the stock's technical indicators remain mixed, with moving averages and the MACD suggesting caution. Short-term volatility is likely as the market digests these risks against the backdrop of strong fundamentals.

Conclusion: A Calculated Entry Point

Uber's recent pullback offers a compelling case for long-term investors who can tolerate near-term volatility. The oversold RSI and proximity to key support levels suggest a potential rebound, while Q3 earnings and AV partnerships highlight durable growth drivers. However, investors must weigh these opportunities against regulatory uncertainties and conflicting technical signals. For those with a multi-year horizon, UBER's strategic repositioning in AVs and robust cash flow generation could justify a measured entry, particularly if the stock tests its $81.30 support level.