Why Uber Stock Hit an All-Time High After Tesla's Robotaxi Rollout

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Key Takeaways

Shares of Uber and Lyft jumped on Friday after Tesla’s introduction to its new robotaxi failed to live up to ridesharing investors’ fears.
Analysts noted Tesla’s much-anticipated event was light on details about the rollout of a ridesharing app that would compete with Uber or Lyft, lifting an uncertainty that has hung over the stocks for months.
Uber shares hit an all-time high, while Tesla slumped further into negative territory for the year.

Shares of Uber Technologies (UBER) jumped to a record high on Friday after Tesla’s (TSLA) much-anticipated robotaxi launch event failed to live up to ridesharing investors’ fears.

Tesla on Thursday evening unveiled its CyberCab, an autonomous car designed for ridesharing, and a 20-seater “RoboVan.” CEO Elon Musk said the CyberCab would cost less than $30,000, and described a vision of individuals operating fleets of CyberCabs as an alternative to driving one car through either Uber or Lyft.

Tesla’s ‘Toothless’ Robotaxi Event a Positive for Uber

Analysts were disappointed by the event, noting it was lighter on details than many Uber and Lyft investors had feared. Jefferies analysts in a note to clients called the CyberCab “toothless,” and said the event was a “best-case outcome for Uber.”

Tesla, the analysts wrote, didn’t “provide verifiable evidence of progress” on autonomous vehicles (AV), and that Uber was “uniquely positioned to support sustainable growth for AV developers.” Jefferies has a “buy” rating on Uber stock.

Bank of America analysts noted that some risks remain, including the potential for RoboVans and CyberCabs to cost significantly less to operate than a conventional rideshare. However, Tesla gave “no specific business model” for a rideshare app that would compete with Uber or Lyft. They maintained their “buy” rating on Uber.

Uber stock was up nearly 10% at $85.66, an all-time high, on Friday afternoon. Shares of competitor Lyft (LYFT) also jumped almost 10%. Tesla shares slumped, putting them down 12% since the start of the year.