RBC Capital reiterates Uber stock rating on autonomous vehicle strategy By Investing.com

RBC Capital reiterated an Outperform on Uber with a $105 price target, implying about 33% upside from the current $79.17 share price. The firm slightly raised estimates, citing durable growth and long-term confidence in Uber's autonomous vehicle strategy, though near-term competition from Waymo and potentially Tesla remains a headwind. Uber's Q1 2026 results were mixed, with EPS of $0.72 beating the $0.70 estimate while revenue of $13.2 billion missed the $13.31 billion consensus.

Analysis

The market is still underpricing the asymmetry in Uber’s mix shift: autonomous headlines matter less for current EBITDA than for who controls the take-rate in the next 12-24 months. The near-term setup is actually better than the long-term bear case suggests because the business can keep compounding even if autonomous penetration is slower than consensus; the main incremental risk is not disruption, but margin reinvestment as Uber defends share against faster-moving AV ecosystems.

The second-order winner is the platform layer around mobility and delivery, not the OEM/AV stack. If robotaxi progress accelerates, capital intensity migrates away from fleet ownership and toward software, dispatch, insurance, and marketplace integration — areas where Uber already has scale advantages. That said, every proof point from Waymo or Tesla increases the probability that Uber’s multiple expands more slowly than earnings, because investors will debate whether this is a network-effects compounder or a transition asset facing eventual disintermediation.

TSLA remains the cleaner “autonomy beta” expression, but from a portfolio perspective it is also the more crowded way to express the theme. The contrarian read is that the market may be overstating near-term disruption risk to Uber while understating how long it takes AV economics to clear regulatory, utilization, and capex hurdles; that usually favors the incumbent’s cash flow profile for multiple quarters, even if the strategic endpoint is unfavorable. The biggest reversal trigger is not a single AV launch, but a sustained sequence of commercial deployments that demonstrate utilization economics and unit profitability across multiple cities.

On the tape, this is more of a relative-value setup than a directional macro trade. With sentiment mildly positive and Uber’s own estimates drifting up, the stock can rerate if earnings remain clean and management avoids signaling aggressive subsidy or AV spend. The risk/reward is strongest if you treat the current move as an underappreciated defensive growth name rather than an outright autonomy winner.

Key Decisions for Investors

• Long UBER on a 4-8 week horizon into the next earnings cycle; use any 3-5% pullback as entry. Base case is modest multiple expansion as estimate revisions continue, with ~15-20% upside if execution stays clean; invalidate on evidence of margin compression from AV-related reinvestment.
• Pair trade: long UBER / short TSLA for 1-3 months if the goal is pure mobility exposure. UBER captures the cash-generative platform economics while TSLA carries more autonomy optimism embedded in the price; expect lower drawdown risk on the long leg if AV adoption slips.
• Buy UBER call spreads 3-6 months out rather than stock if you want convexity without full downside. Structure around a 10-15% upside band to express rerating potential while limiting exposure to any sudden AV headline gap risk.
• For longer-duration portfolios, keep TSLA as the higher-beta autonomy winner but avoid chasing after sharp AV-driven pops; use strength to sell upside against long UBER if you want to isolate convergence risk between the two names.
• Watch for management commentary on AV partnership economics and capex discipline over the next 1-2 quarters; a credible stance that preserves FCF while participating in autonomy would support multiple expansion, while a defensive spend race would cap the stock.