'Pleasant surprise': Uber's stock rises - Amazon robotaxis will appear on its app

Uber will allow users of its app in the US to order robotaxis from Amazon's subsidiary Zoox. The companies plan to launch rides in Las Vegas in the summer and then in Los Angeles. Uber shares jumped more than 3% after the news. According to Evercore, the securities of both Uber and Amazon are among the most attractive among Internet companies right now.

On March 11, Uber and Zoox announced a partnership under which robotaxis of the company owned by Amazon will be available for ordering in the Uber app. The service will be introduced gradually: the first launch is planned in Las Vegas in the summer of 2026, then robotaxis will appear in Los Angeles - tentatively by the middle of 2027, Uber said.

Zoox is already testing its unmanned vehicles on the roads of Las Vegas and San Francisco. The company uses specially designed robotaxis without steering wheel and pedals - with seats facing each other. That said, Zoox does not yet have a permit to operate commercial rides. Last year, the company applied for a two-year exemption from a number of federal vehicle safety standards, Barron's notes.

Bernstein analyst Nikhil Devnani called the partnership with Zoox a positive step for Uber. According to him, Zoox had previously said it had no plans for partnerships, so the agreement was a "pleasant surprise" for the market. At the same time, he noted that autonomous driving technologies are still at an early stage of development, and their safety and scalability have yet to be proven, Barron's quoted Devnani as saying.

Thanks to this news, Uber shares rose in price by 3.6% on March 11, and during the day the growth reached 4.5%. Amazon's shares fell by 0.8%.

Shares of Amazon and Uber are now among the list of securities of Internet companies that look significantly undervalued, according to Evercore analyst Mark Mahaney, quoted by Barron's. For example, Amazon stock is now worth about 26 times projected earnings (P/E ratio) - at its peak, the securities were worth 33 times, Barron's noted.

The average target price of Uber securities is $105.14, which implies growth of 40% relative to the price at the close of the market on March 11. According to Marketwatch, 50 analysts recommend to buy shares of the company (ratings Buy and Overweight), eight advise to hold (Hold), one - to sell (Sell).

The average target price for Amazon shares is $280.6, up 32% from March 11 trading results. In total, 66 of 72 analysts, according to Marketwatch, recommend buying Amazon shares and only six give the stock a Hold rating. Over the past month, there were four fewer recommendations to buy and two more recommendations to hold.

Amazon acquired Zoox in 2020 for more than $1.1 billion, one of the company's largest deals at the time after buying Whole Foods for $13.7 billion in 2017, Barron's recalls.

The market of autonomous cab services in the US is developing rapidly. Waymo, a service owned by Google, remains the leader. The company performs about 400,000 paid rides per week in six US cities. Uber already cooperates with Waymo in several cities and has signed more than 20 partnerships with other developers of autonomous driving technologies, Bloomberg notes.

This article was AI-translated and verified by a human editor