In sync with its ride-sharing roots, Uber Technologies shares a spot on IBD Leaderboard with Tesla and Meta Platforms. Uber stock also joins Tesla and Meta in crafting new chart bases while navigating selling pressure in the market indexes.
Featured as the IBD Stock Of The Day on Sept. 7, Uber stock continues to work on a handle in a third-stage chart pattern. The conventional buy point is 49.49. The stock has also served up an earlier, more aggressive entry at 47.70. On Monday, Uber slipped just under 2% in light volume, but foudn suppport at its 21-day exponential moving average.
Tesla stock appears to be forming a handle as well, The EV powerhouse rejoined IBD Leaderboard as it moved above an aggressive entry near 261, boosted after a bullish call by Morgan Stanley. In a sign of improving technical strength, its 21-day line is on the verge of retaking its longer-term 50-day line.
On Monday, Goldman Sachs cut Tesla's margin outlook as Elon Musk called Saudi factory reports "utterly false."
Meta stock continues to consolidate as it tests support at its 50-day moving average. Currently, the parent of Facebook, Instagram and WhatsApp is showing a 326.20 buy point in a second-stage consolidation, but it may also go on to form a handle to offer an earlier entry. Meta managed to close above its 50-day line to start the week.
But for each of these stocks, keep in mind that the current market environment calls for caution in making any new buys.
Uber Drives Improving Profitability
Beyond its ride-sharing business, Uber has expanded with Uber Eats, Uber Freight and more. In March, Bloomberg and others reported that the company is considering spinning off or selling its freight logistics business.
Uber stock has taken a long and bumpy road since its 2019 IPO. Still not consistently profitable on an annual basis, the company posted a profit of 59 cents a share in 2018, but then lost $5.04 a share and $3.86 a share the next two years. It lost money again in 2022.
In Q2, Uber posted an adjusted profit of 18 cents a share vs. views for a loss of 1 cent. Revenue missed Wall Street forecasts but still rose 14% to $9.23 billion. Gross bookings increased 16% to $36.6 billion. For Q3, the company forecast gross bookings of $34 billion to $35 billion vs. the FactSet consensus of $34.09 billion. Analysts see Uber earning $1 a share this year.
Uber did not join Meta and Tesla stock on this month's list of new buys by the best mutual funds. But Uber stock has flashed signs of institutional demand. Uber sports a B Accumulation/Distribution Rating and has posted four quarters of rising fund ownership. Plus, 25 funds with an A+ rating from IBD own shares in Uber stock.
Uber Stock Rides AI Wave
Uber Technologies aims to drive innovations across all its platforms through Uber AI.
In addition to its global network of riders and drivers, the company also connects hungry folks with their favorite restaurant fare via Uber Eats and creating new freight-booking solutions through Uber Freight. Through its continually expanding Uber AI systems, Uber Technologies is also removing barriers to health care.
As its center for advanced AI research and platforms, Uber AI powers applications in computer vision, natural language processing, deep learning, optimization methods, and intelligent location and sensor processing across all its platforms. Uber also performs fundamental research and works with the broader AI community through publications and open-source projects.
Through these machine learning and AI models, Uber operates across several verticals, from transportation and mobility to customer support and driver-partner navigation. The company's AI research has spurred significant improvements in demand prediction and more seamless pickup experiences this year.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
