10 Best Transportation Stocks to Buy According to Hedge Funds

1. Uber Technologies Inc. (NYSE:UBER)

Number of Hedge Fund Investors: 166

Uber Technologies, Inc. (NYSE:UBER) is the largest ridesharing company in America. The company dominates both the global and U.S. ride-hailing marketplaces, with 25% of the global market and a remarkable 76% of the US market. The company’s extensive network of 171 million users and a large pool of drivers present major barriers to entry, ensuring its market dominance. This dominance has enabled it to continually achieve tremendous growth in gross bookings and revenue, owing to sustained increases in trips and users.

The stock is up by more than 24% year-to-date as it posted solid Q4 2024 results and upgraded its 2025 guidance, making it the Best Transportation Stock. Uber Technologies, Inc. (NYSE:UBER)’s fourth-quarter performance remains solid despite hurdles such as currency headwinds and temporary setbacks. The company’s gross bookings climbed by 18% year on year, driven by a larger user base and greater travel frequency, resulting in 21% revenue growth. The mobility market showed a 24% growth in bookings, showing the strength of Uber’s business model. These results reflect its constant execution and operational strength, notwithstanding external challenges.

Uber Technologies, Inc. (NYSE:UBER) is well-positioned to benefit from the rise of AVs due to its large user base and established infrastructure. This allows it to collaborate with firms like Waymo or Tesla to smoothly set up autonomous vehicles for its massive audience at a low cost, thereby strengthening its dominance in the future of transportation.

Looking ahead, its growth prospects remain excellent, particularly in its mobility and delivery categories, which offer plenty of opportunity for expansion. The firm’s diverse offerings, which include new services such as Uber for Teens and Uber for Business, have increased customer engagement and contributed to more bookings and rides.

Overall, Uber Technologies, Inc. (NYSE:UBER) ranks first on our list of the 10 Best Transportation Stocks to Buy According to Hedge Funds. While we acknowledge the potential for UBER to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UBER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. 10 Best Transportation Stocks to Buy According to Hedge Funds is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.