Uber Falls on Negative News
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Our Equity Top Pick List
We have updated our Equity Top Pick List to reflect the events of the past quarter. The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. It can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. Technical analysis should be used to time / determine the specific investment decision.
Could the momentum return in the semiconductors?
The semiconductor sector has had a challenging quarter, with its performance in recent months lagging behind improvements in underlying fundamentals, even as AI-driven demand remained exceptionally strong. The accelerating adoption of AI by enterprises and the proliferation of AI agents are significantly increasing the demand for computing capacity, which points to a further surge in cloud services and data center investments. Given current supply constraints, record-high backlogs, and higher-than-expected investment needs, we expect further upward revisions to earnings forecasts in the semiconductor industry. Nevertheless, the sector’s valuation appears favorable from a historical perspective, which, in our view, could result in a more attractive risk-return profile in the coming months.
Uber shares failed to follow through on their breakout attempt, and on Friday, negative news concerning the company’s robotaxi business pushed the share price down to the stop-loss level specified in our trading idea.
The decline was not triggered by news related to Uber’s current operations, but rather by a reassessment of the company’s long-term positioning in the robotaxi market. The immediate catalyst was the announcement that, from 2028, Waymo will operate through its own app in Austin and Atlanta, ending its exclusive availability through the Uber app in those markets. Although the near-term financial impact is negligible, the market reacted strongly because the development raises uncertainty over whether Uber’s platform will ultimately be needed for autonomous ride-hailing services at all.
We continue to believe that Uber’s platform and its global user base of more than 200 million represent significant value, and that the service will remain relevant in the era of autonomous taxis. Even if Waymo succeeds in building a standalone service in the United States, Uber may retain a competitive advantage globally. Moreover, Uber continues to expand its autonomous-vehicle strategy in cooperation with several other partners, so we would by no means write the company off. The prospect of intense competition in this subsector is also nothing new, as Uber already faces significant competitive pressure in both mobility and delivery.
Admittedly, it is difficult to identify the eventual winners in such a nascent market. Meanwhile, Uber’s core business continues to grow. The company recently acquired Delivery Hero, significantly strengthening its presence in the delivery market. The nearly USD 15 billion acquisition will give Uber access to several new markets. However, the transaction is expected to close only in the second half of 2027 and naturally carries execution and integration risks. Uber is scheduled to report its quarterly results on August 5, which could also trigger a sizeable move in the share price.
From a technical perspective, the stock failed to act on the long signal issued one month ago. Following three weeks of unsuccessful attempts to move higher, the shares entered a clearly defined downtrend three days ago. The formation of a new swing low may also signal a continuation of the bearish trend. The next major support level is located around USD 59, followed by a stronger support zone near USD 50.
Following the activation of the stop-loss, our trading idea published on June 25 was closed with a loss of approximately 7–8%.
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