We started getting really excited over the summer when Uber ($UBER) started bragging about using AI to optimize their mobility algorithm to increase margins. Their announcement felt a little shoehorned into their overall remarks, so a lot of skeptical analysts on The Street took Uber's AI talk as them trying to draft off of the PR boon Meta was having thanks to their AI-generated margins.
So, we held off updating our framework around Uber until we got more data. But now, after a huge surge upward through our price target, Uber's latest earnings call has demonstrated even bigger gains from an even more efficient core mobility product. That's why now is the perfect time to update our price target to reflect our expectations for 2024.
With scale worldwide, Uber really appears to be turning a corner regarding their core product. Like every other major tech platform, they've begun to scale and master advertising as a solid way to bring better margins to an expensive model.
So, let's explore how Uber has transformed over the past year, and then, we'll take a look at how Uber can keep the accelerator firmly planted on the floor.
The details here are complex, but let's take a high-level look at things:👇