Uber Technologies (UBER +2.67%) is undergoing a significant transition. The company popularized ride-sharing globally and is currently the leader in this industry. It is also a major player in the food delivery business.
However, the universality of its platform appears set to also make it a major player in the autonomous vehicle industry. That could have profound effects on what is now a self-driving car stock over the next five years, meaning the question may not be whether it outperforms the S&P 500 over that period, but by how much.
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The changing nature of Uber
At first glance, Uber may not seem like it would play a dramatically more critical role in the autonomous vehicle industry. It is not a vehicle manufacturer like Tesla, nor has it developed an autonomous platform like Tesla or its competitors such as Alphabet's Waymo or Cruise, the autonomous driving company owned by General Motors.
Nonetheless, Uber predicts a bright future in self-driving technology, and investors have reason to believe it can succeed. The company operates a booking platform that claims 170 million monthly active users worldwide. That far surpasses its U.S. rival Lyft, at around 24 million.
Additionally, Uber has partnered with companies like Waymo and Cruise. Through that alliance, these companies can now book rides through Uber, making Uber's platform all the more essential.
Consequently, these tech companies can focus on improving self-driving, while Uber can earn revenue by bringing customers to these autonomous vehicle platforms. Such deals could become particularly lucrative for Uber over the next five years as self-driving changes the face of local transportation.
The financial state of Uber
Furthermore, the state of Uber's business gives the company time to fully prepare for this transition. In the first quarter of 2025, its revenue of $11.5 billion rose 14% compared to year-ago levels. This includes a 15% rise in mobility, which accounted for 56% of the company's revenue.
Deliveries were 33% of the company's revenue and increased by 18% over the same period. The remainder of revenue comes from its freight business, whose revenue dropped by 2%. In 2024, revenue surged 18%, confirming its current growth is not a one-time event.
Moreover, Uber has become increasingly profitable. The company earned almost $1.8 billion in net income in Q1, up from a loss of $654 million in the year-ago quarter. That should bolster the company's existing growth as it turned a full-year profit in the previous two years.
Investors may have already begun to take notice of the rising profits and potential in autonomous driving, as the stock has risen by around 55% since the beginning of the year.
NYSE: UBER
Key Data Points
Indeed, a one-time tax benefit in 2024 skewed the P/E ratio, so its 16 earnings multiple may look deceptively low. Still, even at a forward P/E ratio of 26, investors are likely buying into a compelling growth story at a bargain, which may serve as another bullish sign for Uber stock in the second half of the 2020s.
Uber in five years
Over the next five years, Uber is likely to outperform the market by a substantial margin.
Uber has already begun partnering with autonomous vehicle companies, linking prospective customers to robotaxis. Thanks to that rideshare platform, the company is poised to connect drivers worldwide with autonomous vehicles. This should not only expand its customer base but also supercharge revenues, further building on Uber's profits.
Thanks to the double-digit revenue growth, Uber stock should have an easier time beating the market over the next five years. Additionally, given the stock's growth in 2025, investors have likely begun to take notice of the company's rising value proposition. With the stock trading at just 26 times forward earnings, investors might want to consider buying Uber stock while it is relatively inexpensive.
