BofA Securities has maintained a Buy rating on Uber Technologies Inc . (NYSE: NYSE:UBER) with a consistent price target of $88.00.
The focus is on the upcoming Tesla (NASDAQ:TSLA) Robotaxi event scheduled for Thursday, October 10, in Los Angeles, which is anticipated to start at 7pm PT. This event is especially significant as it had been delayed to allow for an engineering modification to the Robotaxi vehicle, known as CyberCab, and to construct multiple prototypes.
The analyst from BofA Securities highlighted several concerns that Uber investors might have regarding Tesla's foray into the robotaxi space.
These concerns include the possibility of Tesla introducing a cost-effective autonomous vehicle (AV) tailored for ridesharing that could operate at a lower cost per mile compared to what Uber currently pays its drivers.
Additionally, the development of a competitive mobility application by Tesla could enable users to order Tesla rides directly, potentially rivaling Uber's platform.
Moreover, Tesla's advancements in data, artificial intelligence, and vehicle technology may present competitive challenges to Uber, especially if Tesla's vehicles prove to be more efficient or advanced than those of Uber's potential AV partners.
The BofA analyst also pointed out that other announcements that could impact Uber investors may emerge from the event. These could include specific launch dates for robotaxi services in certain markets, demonstrations of enhanced Full Self-Driving (FSD) capabilities, and insights into the market opportunity for Tesla's robotaxi service.
In other recent news, Tesla continues to make significant strides in the artificial intelligence and autonomous vehicles sector. The company's upcoming AI Robot event is expected to showcase advancements in autonomous navigation and integration of humanoid joint articulation with vision and decision-making capabilities.
Analyst firms Oppenheimer, Truist Securities, and RBC Capital maintain a Perform, Hold, and Outperform rating on Tesla shares respectively, emphasizing the significance of the event. Tesla's third-quarter production and delivery figures closely matched consensus estimates with approximately 462,000 units delivered.
To stimulate demand, the company initiated financing offers in the United States and China, and plans to issue $783 million in bonds secured by automotive leases. In other developments, Rio Tinto (NYSE:RIO) is negotiating to acquire lithium mining company Arcadium, potentially becoming the third-largest lithium producer worldwide. Tesla is also developing new versions of its in-house battery cells, aiming to power a range of electric vehicles including the anticipated Cybertruck and a forthcoming robotaxi.
InvestingPro Insights
As Tesla prepares to unveil its Robotaxi, InvestingPro data offers valuable context for investors considering the potential impact on both Tesla and Uber. Tesla's market capitalization stands at an impressive $783.55 billion, reflecting its dominant position in the automotive industry. The company's P/E ratio of 62.98 indicates that investors are pricing in significant future growth, possibly including the success of initiatives like the Robotaxi.
Tesla's revenue for the last twelve months as of Q2 2024 reached $95.32 billion, with a modest growth of 1.37%. This growth rate suggests that new ventures like the Robotaxi could be crucial for accelerating Tesla's expansion. An InvestingPro Tip notes that Tesla is a "prominent player in the Automobiles industry," which positions it well for the Robotaxi launch.
Another relevant InvestingPro Tip highlights that Tesla "holds more cash than debt on its balance sheet," potentially providing the financial flexibility needed to invest in autonomous vehicle technology. This could be a significant advantage as the company enters the competitive ridesharing market.
For investors seeking a deeper understanding of Tesla's potential in the Robotaxi space, InvestingPro offers 18 additional tips that could provide further insights into the company's financial health and market position.
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