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These 2 Mobility Stocks Are Flying Higher Tuesday

By Dan Caplinger – Sep 21, 2021 at 1:09PM

Key Points

  • Markets were broadly higher on Tuesday.
  • QuantumScape climbed on a deal with a second automaker interested in its EV battery tech.
  • Uber gained ground as it boosted earnings guidance.

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A nice rebound has investors in a better mood.

The stock market recovered some lost ground on Tuesday morning, bouncing back from a big loss in Monday's session. By 11:45 a.m. EDT, the Dow Jones Industrial Average (^DJI -0.90%) was up 145 points to 34,115. The S&P 500 (^GSPC -0.73%) had gained 20 points to 4,377, and the Nasdaq Composite (^IXIC -0.70%) had picked up 108 points to 14,822.

A number of areas in the mobility space have gotten more attention from investors lately, including electric vehicle technology and ridesharing services. Both QuantumScape (QS 2.15%) and Uber Technologies (UBER 0.38%) saw their stocks get a nice lift on Tuesday morning. Below, we'll look at what news was behind the moves and whether the stocks might build up some forward momentum.

QuantumScape makes a deal

Shares of QuantumScape were up more than 14% on Tuesday morning. The EV battery technology specialist revealed in a somewhat cryptic filing with the U.S. Securities and Exchange Commission that it had entered into a significant agreement with a top automaker.

QuantumScape has had a long partnership with German automaker Volkswagen (VWAGY -0.32%). However, the SEC filing revealed that the battery tech specialist had made a deal with a second automotive manufacturer with global sales that put it into the top 10 in the industry. It just didn't reveal the name of that company.

Details on the deal were fairly sparse. However, QuantumScape will work with the automaker to evaluate prototypes of its solid-state battery cells. The automaker will purchase 10 megawatt-hours of capacity from QuantumScape's QS-0 pre-pilot production line facility, with specified intermediate milestones along the way. QuantumScape expects more advanced prototypes of battery cells to be delivered before QS-0 production commences in 2023.

Investors are hopeful that QuantumScape's solid-state lithium battery technology will result in a usable, denser-energy solution that will improve EV range and charging speed. The fact that the company has signed up another automaker beyond VW is a good sign that QuantumScape is making enough progress to attract interested strategic partners at a relatively early stage.

Person in car looking at smartphone.

Image source: Getty Images.

Riding higher

Elsewhere, shares of Uber Technologies were on the move, rising more than 10%. The ride-hailing service gave investors some good news in the form of improved guidance for the third quarter of 2021.

Uber filed a report with the SEC detailing its update of its previous third-quarter outlook. The company now expects that its gross bookings will be in the middle of its earlier guidance range, coming in between $22.8 billion and $23.2 billion. However, it sees its adjusted pre-tax operating earnings coming in between a loss of $25 million and a profit of $25 million. That's considerably better than the $100 million loss that Uber initially projected. Uber attributed the bottom-line improvements to strong performance in its mobility and delivery segments.

Even better, Uber now believes that it should reach positive adjusted pre-tax operating earnings by the fourth quarter. That figure could be as high as $100 million.

Uber has been a controversial stock, most notably because of its broad use of independent contractors. However, after an incredibly difficult period for its ride-hailing business, Uber is starting to see business bounce back, and that could prove to be the catalyst investors have waited to see as it aims to reach its full potential.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Volkswagen AG. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

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