Uber's Valuation Faces Near-Term Pressure Amid Autonomous Vehicle Uncertainty, BofA Says

Bank of America Securities has adjusted its outlook on Uber Technologies Inc. (NYSE: UBER), highlighting near-term headwinds from the uncertain path to autonomous vehicle (AV) commercialization. In a note to clients, analyst Justin Post lowered the firm's price target on the ride-hailing giant to $93 from $96, while maintaining a Buy rating.

Post identified the timeline and commercial viability of autonomous vehicles as a key overhang on Uber's valuation in the coming quarters. "The market is grappling with how to price the AV opportunity amidst shifting regulatory and technological milestones," the note stated. The analyst clarified, however, that Uber's core business fundamentals—including steady revenue growth and projected margin improvements by 2025—remain strong. A clearer AV roadmap, he argued, would be a primary catalyst for future valuation expansion.

The revision comes just days after Uber announced the formation of AV Labs, an internal team dedicated to leveraging its vast network data to advance autonomous driving systems. Launched on January 27, the initiative aims to tackle a critical hurdle in AV development: the "long tail" of rare and complex driving scenarios. By creating a data pipeline that records these edge cases from millions of daily trips, Uber hopes to generate superior training data to accelerate machine learning for self-driving technology.

"AV Labs represents a strategic shift from building hardware to mastering the data ecosystem," a company spokesperson said. "Our real-world operations give us a unique dataset to help solve autonomy's toughest problems."

Uber, which achieved its first full-year operating profit in 2023, operates a global platform spanning ride-hailing, food delivery, and freight. The company has increasingly positioned itself as a logistics and mobility ecosystem, with expansions into advertising and transit planning.

Market Voices: Analysts and Investors Weigh In

We gathered reactions from industry observers:

• David Chen, Portfolio Manager at Horizon Tech Fund: "BofA's move is a tactical adjustment, not a structural call. Uber's data moat is deepening with AV Labs. The near-term noise around AVs doesn't change the long-term logistics transformation story."
• Maya Rodriguez, Senior Editor at The Mobility Report: "This is a reality check. The AV hype cycle has peaked, and investors are now demanding tangible progress. Uber's data play is smart, but it's a long-term bet in a sector burning capital."
• Frank Kellerman, Independent Investor: "It's pure distraction! Uber needs to focus on driver retention and delivery margins, not sci-fi projects. This AV fantasy is a drag on valuation, and Post's cut doesn't go far enough. Management is chasing shiny objects while the core business faces real competition."
• Dr. Anika Sharma, Transportation Tech Analyst: "The data flywheel concept is theoretically sound. If Uber can systematically convert edge cases into training assets, it could become a critical infrastructure provider for the entire AV industry, not just a user."

Disclosure: This is an independent news analysis. The author holds no positions in the securities mentioned.