We recently published a list of 10 Latest AI News You Shouldn’t Miss. In this article, we are going to take a look at where Uber Technologies, Inc. (NYSE:UBER) stands against other latest AI news you shouldn’t miss.
Anastasia Amoroso, iCapital chief investment officer, said in a latest program on CNBC that 2025 will be the year of AI software, data centers and power. She believes the AI rally is broadening out.
“Artificial intelligence, as I mentioned, is carrying itself over into 2025, and I think it’s broadening. Last year, last two years, have been about semiconductors. I think this year has to be about AI software; it has to be about AI monetization, but it also has to be about AI power. And it’s not just, you know, a number of headlines talking about data centers and how much they consume, and the fact that I think you need eight times the electricity to run an AI data center. It’s an actual real trend, which I also think the Trump Administration is going to support as well.”
The analyst also said investors should consider alternative investments or private markets as she believes private equity valuations are below the levels seen in public markets.
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For this article we picked 10 AI stocks trending on latest news. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up view of a hand holding a smartphone, using a ride sharing app.
Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Investors: 136
Joshua Brown, the co-founder and CEO of Ritholtz Wealth Management, made the case for Uber Technologies, Inc. (NYSE:UBER) in a latest program on CNBC. He thinks it’s “ridiculous” to sell the stock because of the robotaxi threat. He thinks robo taxis would boost Uber’s business:
“This is the most mispriced stock in all of large cap tech. I know it’s not a tech stock by taxonomy. I know it’s considered a transportation. I cannot believe the ridiculous idea that this company’s cash flows are going to be affected by Robo taxis that are not on the road from Tesla. But that’s kind of what happened.
I think everyone understands that autonomous is the future. If you’re sitting at Uber Technologies, Inc. (NYSE:UBER) right now, all you’re doing is rubbing your hands together. I can’t wait. The single biggest problem for Uber is capacity. They don’t have enough rides in order to do this the way that they really want to do this.
So, if there are autonomous vehicles in cities all over America, those can be aggregated into the Uber app. Uber Technologies, Inc. (NYSE:UBER) is currently working on a pilot with Weo in the cities of Austin and Atlanta, where the Weo cars will be included as an option into the Uber app.
Uber is going to be the demand aggregator for the autonomous age. People selling the stock because they think it’s like a roadkill because of the Cyber taxi or whatever, they completely miss the story.”
RiverPark Large Growth Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its first quarter 2024 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management’s guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA.
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
Overall, UBER ranks 3rd on our list of the latest AI news you shouldn’t miss. While we acknowledge the potential of UBER, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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. This article is originally published at Insider Monkey.
