Ride-hailing and food delivery giant Uber Technologies (NYSE: UBER) has experienced an impressive surge in its stock price in 2023, fueled by a group of drivers including better-than-expected financial results, a growing user base, and rapid expansion of the artificial intelligence (AI), which Uber employs in its operations.
The company attracted further investor optimism after its food delivery service, Uber Eats, announced a deal with robots maker Serve Robotics that will provide the former with 2,000 sophisticated, AI-based robots that will be used for delivering food.
Uber Eats will use Serve’s robots across various, unspecified US delivery markets by the end of this year, Serve Robotics CEO Ali Kashani told CNBC’s Squawk Box on June 14.
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“There is a lot of AI in here. So we have dozens of different AI models, large language models that let the robot understand the world, where to navigate, who to avoid, and it can tell if a driver is about to collide with a robot.”
– Kashani told CNBC.
The deal represents an expansion of the 2022 initial partnership between the two companies, which included more than 200 restaurants in Los Angeles. Serve Robotics said its robotic deliveries rose 30% month-on-month since it began the deliveries last year.
The deal’s potential impact on UBER stock
Since Uber Eats’ partnership expansion was announced, the company’s stock price advanced more than 10.4%, from $37.5 per share to around $41 per share. During that period, the ride-hailing firm added nearly $8 billion to its market cap.
But that should not come as a surprise, given that innovative projects and initiatives launched by tech companies tend to result in positive reactions from investors, ultimately propelling an increase in stock prices.
Given that this deal is unique in several ways – as it validates Serve Robotics’s goal to mass commercialize robotics for autonomous delivery, and indicates that Uber is advancing its commitment to autonomy – it is no wonder Uber Technologies witnessed fresh investor interest in recent weeks.
UBER was already on an upward trajectory in 2023. Last month, the company reported 29% year-over-year revenue growth for Q1 2023, while the number of Uber’s monthly active platform customers (MAPC) rose to 130 million in Q4, up 13% from a year ago.
Uber stock price analysis
At the time of publication, shares of Uber were standing at $41.41, almost unchanged in the past 24 hours. Over the past month, the stock soared over 7.1% and is up more than 63% since the start of the year.
On June 13, stock market analysts rated Uber’s stock as a ‘strong buy,’ citing “long-term potential, strong flywheel economics, and growing brand loyalty.
The financial experts believe Uber could reach 200 million MAPC by the end of 2026, which could lead to the company’s revenue doubling to $67 billion during that period.
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