Uber (UBER): Is the Recent Weakness a Buying Opportunity Amid a Strategic Rebirth?

Uber Technologies (UBER) has seen its stock price fall by 6.3% in the past month, underperforming the S&P 500's 2.3% gain. This volatility has sparked debate among investors: is the decline a temporary correction in a high-growth story, or a warning sign of structural challenges? The answer lies in Uber's strategic pivot toward autonomous vehicle (AV) partnerships and its robust gross bookings growth, which together position the company as a potential catalyst for long-term value creation.

Strategic Shift: From Platform to Autonomous Ecosystem

Uber's 2025 AV strategy is a departure from its traditional ride-hailing model. Instead of building proprietary hardware, the company is leveraging partnerships to accelerate deployment of robotaxis. Key collaborations include:
- Pony AI and WeRide: Scaling robotaxi fleets in the Middle East and Asia, with plans to expand to 15+ international markets.
- Lucid and Nuro: Deploying 20,000+ Level 4 autonomous vehicles in U.S. urban hubs by 2026, using Lucid's electric SUVs and Nuro's self-driving tech.
- Baidu Apollo Go: Integrating 1,000+ driverless vehicles in Asia and the Middle East, leveraging Baidu's 11 million public rides to date.

These partnerships reduce R&D costs and regulatory risk while enabling Uber to focus on its core strength: platform integration. By 2026, the company aims to have 50,000+ autonomous vehicles on its network, a scale that could redefine urban mobility.

Gross Bookings: The Engine of Growth

Uber's gross bookings growth remains a critical metric. In Q1 2025, gross bookings hit $42.8 billion, a 14% year-over-year increase (18% on a constant currency basis). This was driven by 3.0 billion trips and a 14% rise in monthly active platform consumers (MAPCs). For Q2 2025, the company projects gross bookings of $45.75–$47.25 billion (16–20% growth), despite a 1.5 percentage point currency headwind.

The significance of gross bookings lies in their direct correlation to revenue and Adjusted EBITDA. Uber's take rate (revenue per $1 of gross bookings) has steadily increased, from 27% in 2024 to 29% in 2025, bolstered by Uber One membership and advertising revenue. Analysts project this metric to rise to 30% by 2030, unlocking higher margins as the company scales.

Valuation and Risks: A Premium for Innovation

Uber's forward P/E of 26.93 exceeds the industry average of 19.27, reflecting investor optimism about its AV ambitions. However, the stock's recent weakness—despite strong Q1 earnings and a $2.3 billion free cash flow—highlights near-term concerns:
1. Currency and Tariff Headwinds: A 3 percentage point impact on Mobility segment growth in Q2 2025.
2. Competition: Tesla's Cybercab announcement in October 2024 raised fears of disruption, though regulatory delays may delay its launch until 2027.
3. Profitability Concerns: Non-recurring tax benefits in 2024 inflated reported profits, raising questions about the sustainability of earnings.

Yet these risks are offset by Uber's financial durability. The company's adjusted EBITDA grew 35% year-over-year in Q1 2025 to $1.9 billion, and free cash flow is projected to rise to $3 billion in 2025. Analysts at Goldman Sachs and BofA Securities maintain “buy” ratings, citing the $1 trillion U.S. AV market opportunity and Uber's first-mover advantage in partnerships.

Investment Thesis: Buy the Weakness, Not the Noise

Uber's stock weakness appears overblown. While Tesla's Cybercab and GM's Cruise exit have created short-term uncertainty, Uber's AV strategy is more scalable and diversified. The company's partnerships with Lucid, Nuro, and Baidu provide a path to rapid deployment without the capital intensity of in-house development.

Moreover, gross bookings growth is a strong tailwind. With 3.0 billion trips in Q1 2025 and a 18% constant currency growth rate, Uber is on track to surpass $45 billion in gross bookings for Q2. Analysts project a 10% compound annual growth rate (CAGR) through 2034, with gross bookings reaching $433 billion—a 10x increase from 2025 levels.

For investors, the key question is whether the current valuation justifies the long-term potential. At a forward P/E of 26.93, Uber trades at a 30% premium to its 5-year average. However, its PEG ratio (price-to-earnings-to-growth) is below 1.0, suggesting the stock is undervalued relative to its projected 40%+ earnings growth over the next 3–5 years.

Conclusion: A High-Conviction Bet for Long-Term Growth

Uber's strategic shift to autonomous partnerships and its expanding gross bookings base make it a compelling long-term investment. While near-term volatility and valuation concerns are valid, the company's financial strength, strategic agility, and first-mover advantage in AV deployments position it to dominate the robotaxi market. Investors willing to weather short-term noise may find the recent weakness an opportunity to buy into a company poised to redefine urban mobility.