Uber Technologies Inc

Uber continues to demonstrate very strong operating and financial performance, with earnings on pace to grow approximately 35% this year. Despite broad investor concern regarding the potential long-term impact of autonomous vehicles, Uber's valuation is increasingly disconnected from its fundamentals, trading at 19 times earnings, near its lowest-ever valuation. The company is making significant progress with its strategic partners, with AV launches planned in multiple new cities later this year, indicating a strong growth trajectory.

Uber is mentioned in the context of the broader AI spending landscape, highlighting concerns about excessive capital expenditure in AI technologies. The letter notes that Uber reportedly burned through its entire annual AI tooling budget in just four months, indicating a sensitivity to the costs associated with AI token transactions. This reflects a trend among companies in the AI space, where the rapid consumption of resources is leading to financial scrutiny and potential overextension.

Uber continues to execute effectively on our original 2022 investment thesis. The network effects have fully taken hold, driving profitable growth and demonstrating a durable competitive advantage in global mobility and delivery. I believe it will be a winner in the autonomous vehicle era.

Uber reportedly burned through its entire 2026 AI budget in four months and was forced to cap employee spending on AI tools. Other companies are moving from 'tokenmaxxing' to 'modelmaxxing,' learning that encouraging AI usage for its own sake is not a viable strategy.

Uber, along with other quality internet businesses, is currently trading at valuation multiples below where they bottomed in 2022, at around 10 - 12x P/E on a 3-year forward basis. This is a significant discount compared to their historical P/Es of 25x or higher, given their superior business models. The market's current valuation reflects a lack of appetite for anything non-AI-related, but Uber is well-positioned to leverage AI to enhance its business model and unlock new growth avenues. As long as near-term earnings estimates hold, the potential for a 2-3x re-rating in stock prices exists if they can prove their earnings growth over the next few years.

While many investors remain focused on long-term fears surrounding autonomous vehicles, we believe the market is underappreciating the strength of the company’s current business, its growing cash flow generation, and the potentially valuable role it could play in a future dominated by autonomous vehicles. Our argument is that valuation still matters. It always has. Paying too much for even an exceptional business can lead to years of disappointing returns, while buying a strong business at a sensible price can produce the opposite outcome.

We acquired Uber on its recent stock price pull-back. Uber’s competitive advantages stem from its large-scale networks and flywheels – between users, drivers, merchants, and advertisers – particularly as they interface with the complex and messy real world. Our analysis suggests these advantages will likely thrive in an agentic AI world. Furthermore, recent datapoints suggest the probability of potential disruption from autonomous vehicles is declining, while the probability of the mobility market expanding is increasing.

Uber Technologies, Inc. was a detractor in the fourth quarter following its third-quarter 2025 earnings report, which delivered strong operating performance but was met with a muted market reaction. Gross Bookings and adjusted EBITDA both came in near the high end of management’s guidance, driven by accelerating demand across both Mobility and Delivery. We continue to view Uber as a leading global platform benefiting from secular shifts toward on-demand transportation, delivery, and local commerce. As robotaxi adoption expands, we expect the total addressable market for on-demand transportation to grow meaningfully, supporting long-term volume and revenue growth.

Uber Technologies, Inc. was a detractor in the fourth quarter following its third-quarter 2025 earnings report, which delivered strong operating performance but was met with a muted market reaction. Gross Bookings and adjusted EBITDA both came in near the high end of management’s guidance, driven by accelerating demand across both Mobility and Delivery. We continue to view Uber as a leading global platform benefiting from secular shifts toward on-demand transportation, delivery, and local commerce. As robotaxi adoption expands, we expect the total addressable market for on-demand transportation to grow meaningfully, supporting long-term volume and revenue growth.

We have increased our position in Uber Technologies, Inc. from 1.0% to 1.5% as we believe it is well-positioned to benefit from the ongoing advancements in AI and its strong market presence. The company continues to demonstrate a robust free cash flow yield, which is a critical factor in our investment strategy focused on capital preservation and long-term fundamentals. We see Uber as having a significant moat in the ride-sharing and delivery markets, which supports our bullish outlook.