Uber Was Supposed To Be Obsolete By Now
Autonomy is here. Uber just posted 24% growth anyway.
The week before earnings told you everything. Right before the print, two things happened that should have wrecked Uber’s stock. Elon Musk announced Tesla wouldn’t need to be in the Uber app. Then word came out that Waymo was looking to ending its partnership with Uber.
That combination is the core of the bear case in two headlines. The fear on Uber has never been about ride growth or delivery margins. It’s been that Uber becomes irrelevant the moment autonomous vehicles scale, that it’s just the middleman standing between riders and robots that don’t need a middleman. Both of those headlines in the same week said exactly that out loud.
You’d expect a stock built to hat fear to sell off double digits on news like that. It didn’t. It dipped and to by much. Then Uber reported earnings, dipped again on the print and climbed back within days.
That tells you something real. The stock has already been derisked. The autonomy fear isn’t a surprise anymore. It’s priced in and has been for a while. Uber was already down 17% year to date heading into the quarter that beat on bookings, EBITDA, and free cash flow.
I keep thinking about Google here. Not long ago, the market had basically written Google’s obituary. Search was supposedly dead. AI was going to eat it alive and the stock traded like a company in decline. That narrative aged badly.
I’m not saying Uber’s outcome has to rhyme with Google’s. Nobody knows that yet. But sometimes the market prices in the disaster case long before the disaster actually happens.
Readers have been asking for of my actual thought on specific names like this one. I’ve done a couple deep stock dives recently on CrowdStrike and Netflix. But they take time to put together, so they don’t come out as often as I’d like. This is the first in a new format that I’m building for exactly that.
If you’ve got 30 seconds for the rest, read the One Cup below. If you’ve got five to ten minute, keep going. This is where the actual work is.
Either way, thank you for being here. Spilled Coffee is growing and it’s one of the top newsletters out there because of you the reader, not because of me. So genuinely, thank you.