Uber Stock: A Contrarian Bet in the Autonomous Vehicle Revolution

The question of whether Uber Technologies (UBER) is undervalued amid the looming threat of autonomous vehicles (AVs) has sparked intense debate among investors. While skeptics highlight the existential risks posed by driverless technology, a closer examination of Uber's financials, strategic partnerships, and industry dynamics reveals a compelling contrarian opportunity. In a market that often overreacts to short-term uncertainties, Uber's valuation appears to discount its long-term potential in a disruptive sector.

Financial Metrics: A Value Stock in a Growth Sector

Uber's current valuation metrics suggest it is trading at a significant discount relative to both its historical performance and industry peers. As of Q3 2025, Uber's price-to-earnings (P/E) ratio stands at 11.76, far below its 3-year average of 47.2 and well under the P/E ratios of ride-sharing competitors like Lyft (60.45) and DoorDash (110.29) according to Tipranks data. This divergence reflects a market that prioritizes growth over profitability for many tech peers, while Uber is increasingly seen as a value stock.

However, Uber's enterprise value (EV) multiples tell a more nuanced story. The company trades at an EV/EBITDA of 26.07 and an EV/Revenue of 3.99 according to multiples.vc, which appear elevated compared to the transportation sector's median EV/EBITDA of 9.2x and EV/Revenue of 1.4x according to PCE companies. These metrics suggest investors are factoring in Uber's potential to capture a significant share of the AV-driven mobility market, even as they remain cautious about near-term profitability. The company's $191 billion market cap and $195 billion enterprise value according to Monexa analysis also position it as a mid-cap player in a sector dominated by larger, more established logistics firms.

Autonomous Vehicle Strategy: Partnerships Over Proprietary Tech

Uber's approach to AVs in 2025 is defined by strategic collaboration rather than in-house development. The company has forged partnerships with Waymo, WeRide, and other AV startups to integrate driverless rides into its platform, avoiding the capital intensity of building its own technology. This asset-light model aligns with broader industry trends favoring scalability over ownership, particularly in a high-interest-rate environment where operational flexibility is critical.

By contrast, competitors like Tesla and Zoox are pursuing self-sufficient AV strategies. Tesla's camera-only Full Self-Driving (FSD) system and Cybercab, slated for 2025 deployment, represent a high-risk, high-reward bet on proprietary technology. Zoox, Amazon's subsidiary, has developed purpose-built robotaxis but faces delays due to software issues. Uber's diversified partnership model, while less glamorous, mitigates technological and financial risks by spreading them across multiple providers.

Contrarian Risks and Rewards

Critics argue that Uber's reliance on third-party AV partners could undermine its long-term competitiveness. For instance, partners like Motional and Avride face capital constraints and delayed timelines, raising questions about the stability of Uber's AV ecosystem. Additionally, market leaders like Waymo and Tesla may dominate the AV space, potentially undercutting Uber's role as an aggregator.

Yet, these risks are precisely what make Uber an attractive contrarian play. The market's skepticism is reflected in its muted valuation multiples, which fail to account for the company's operational improvements. In 2024, Uber's net income surged to $9.86 billion, and free cash flow reached $6.89 billion, driven by cost discipline and margin expansion. Analysts project AV-related revenue could hit $78.6 billion by 2029, fueled by AI-driven optimizations and dynamic pricing.

Moreover, Uber's partnerships offer unique advantages. Collaborations with Baidu and Lucid, for example, enable rapid deployment of AVs in Asia and the Middle East, regions with high growth potential. The company's "halo effect"-where AVs enhance brand perception and rider engagement-further strengthens its value proposition.

The Contrarian Thesis

Uber's stock appears undervalued when viewed through the lens of a disruptive market transition. While the company's AV strategy lacks the technological flair of Tesla or Zoox, its partnership-driven model is both pragmatic and scalable. The current valuation discounts the long-term potential of AV integration, which could redefine urban mobility and unlock new revenue streams.

For investors willing to tolerate short-term uncertainties, Uber represents a compelling opportunity. The market's focus on near-term risks overlooks the company's financial strength, strategic agility, and first-mover advantage in a sector poised for transformation. As AV adoption accelerates, Uber's role as a platform for autonomous mobility could prove far more valuable than its current multiples suggest.