Investing.com – Uber Technologies Inc (NYSE:UBER)

Uber Technologies Inc's recent stock dip presents an attractive entry point for investors, as stated in a Jefferies analyst note. Despite concerns over competition from autonomous vehicle (AV) technology impacting the stock, Jefferies anticipates that the near-term effects on Uber's core rideshare business will be minimal.

“We believe recent weakness creates a more attractive entry point for UBER,” wrote Jefferies analyst Brent Thill. “The near-term impact to rideshare will be minimal and our view that robotaxi fleets are best off partnering with rideshare.”

Thill argues that Uber is “uniquely positioned” to benefit from robotaxis through partnerships with AV developers, leveraging its infrastructure, customer base, and operational expertise to increase robotaxi fleet utilization and efficiency.

The report adds that AV developers will likely choose to partner with rideshare platforms like Uber rather than maintaining standalone fleets. In terms of operational costs, Jefferies estimates that standalone robotaxi fleets face higher operating expenses at $14.51 per ride, compared to $11.19 per ride for partnered fleets. This discrepancy arises from lower utilization rates in standalone fleets, which must maintain larger inventories to handle peak demand. As a result, standalone operators may find it challenging to remain competitive on pricing without offering discounts to attract customers from established rideshare services.

Thill reiterated his "buy" rating on Uber stock, setting a price target of $100.