New Uber Price Target After Nvidia Deal Challenges Tesla
Uber is teaming with Nvidia to race against Tesla as autonomous driving comes of age.
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Uber CEO Dara Khosrowshahi
“The ChatGPT moment for self-driving cars has arrived.”
-Jensen Huang, Nvidia CEO
Five months ago, Uber (UBER) reached its all-time closing high of $100. By mid-March, the stock had lost 25% of that value.
Uber hit a pothole because Tesla’s (TSLA) latest self-driving software, FSD 14.2.2, learned how to avoid such obstacles. The reviews were in, and Tesla’s autonomous driving technology had advanced to an almost-human level of competency.
It wasn’t hard to envision an armada of self-driving Tesla Cybercabs filling the streets, driving circles around confused Uber drivers and leaving the once-dominant ride share provider in its dust.
Drive My Car
Rather than roll over for Tesla, though, Uber came up with a different self-driving game plan.
The company agreed to partner with Nvidia (NVDA) to create a fleet of self-driving vehicles. The plan is to deploy 100,000 such vehicles, with the first models rolling out next year.
According to Uber President and COO Andrew McDonald, Uber and Nvidia plan to deploy robotaxis in 28 cities by 2028.
Uber isn’t alone. Nvidia recently announced deals for autonomous vehicle development with Hyundai, Nissan and Isuzu, as well as China-based BYD and Geely. By taking on autonomous driving, Nvidia hopes to leverage its Level 4 platform into a fast-growing and potentially profitable area of technology.
Crosstown Traffic
In response to this news, Uber shares shot higher by over 4%. In the process, the stock broke above a bearish trend line that had contained the shares since November (black dotted line). Uber also managed to close above its 50-day moving average (blue) for the first time in two months.
Tuesday’s price action also resulted in a higher high (HH) on Uber’s chart. The stock has now formed a higher low (HL) and a higher high, indicative of the start of a bullish trend.
Uber’s New Price Target Is $88
I used a Fibonacci tool (red) to locate the 61.8% retracement of Uber’s previous bear trend. A rally to $88 would place Uber 61.8% of the way back to its all-time high, set in October. This makes $88 our new target.
Bottom Line
Unlike other players new to autonomous driving, Uber already has a huge built-in customer base. While self-driving vehicle software may eventually become commodified, Uber’s customer base gives it a head start on its competitors.
Related: Hyundai Is Asia's Stock Star This Year After Nvidia Announcement
At the time of publication, Ponsi was long TSLA, NVDA and UBER.
