Uber’s stock has reached new heights through the first three quarters of 2025.
This year has seen a continuation of the ongoing artificial intelligence craze. Besides that, investors have been faced with uncertainty around trade policy and the Federal Reserve’s next moves. This can be a lot to deal with.
This macro backdrop hasn’t gotten in Uber Technologies‘ (UBER -0.08%) way. Its shares have rocketed 60% higher in 2025 (as of Oct. 1). They are trading just slightly off their record high, demonstrating the market’s bullishness toward the business. There could still be upside.
Here are three reasons investors might want to buy this consumer discretionary stock like there’s no tomorrow.
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1. Despite huge gains, Uber still has growth potential
The disruption that Uber’s tech platform has caused in the past nearly two decades is unbelievable. It might have felt crazy getting into a stranger’s car in the early days, but now this is the new normal.
The company has rapidly grown, and it now has a presence in 15,000 cities around the world. Its revenue and monthly active users (MAUs) have surged 57% and 48%, respectively, just in the past three years, a clear sign of broader adoption of the platform. Uber dominates in the U.S., commanding 75% market share in the ride-hailing industry.
During the second quarter, gross bookings totaled $187 billion on an annualized basis, underscoring the impressive scale Uber has these days. However, there is still lots of growth potential, with the company focusing on some key areas of improvement.
Getting riders to use the service more frequently can unlock more gross bookings and revenue. Frequency might get a boost should the cost per mile of travel come down. And this could happen if autonomous vehicle technology (more on this below) advances significantly to the point of broader adoption.
There are 36 million Uber One members. These users spend three times the amount as non-members. Getting more people to sign up for this subscription can be extremely lucrative.
Uber has leaned on its network to launch adjacent services as well. The app sells ad space to businesses and restaurants looking to target a wide audience. Uber is leveraging all the data it has to generate more revenue.
2. CEO Dara Khosrowshahi has focused on increasing profits
Dara Khosrowshahi became CEO in 2017, taking over from founder Travis Kalanick. This marked a transition in Uber’s history, as the company upgraded itself from a money-losing operation to an extremely profitable entity. Khosrowshahi focused his efforts on creating a more efficient business that’s financially sound.
Uber’s operating income increased 82% year over year in Q2 to $1.5 billion. This helped generate almost $2.5 billion in free cash flow. Management is so confident in the trajectory of the bottom line that it instituted a fresh $20 billion stock buyback program.
According to the management team, Uber’s adjusted EBITDA is set to increase at a compound annual rate of 35% to 40% between 2024 and 2027. Wall Street’s assessment isn’t as robust, but analysts expect the company’s EBITDA to rise at a yearly clip of 28% between 2024 and 2027.
At a high level, it makes sense why Uber can continue to squeeze higher profits from the business. Think about every additional ride or delivery that happens on the platform. Because the technological infrastructure is already built out, these transactions should carry high margins.
3. It’s difficult to disrupt a powerful network effect
The third reason to buy Uber shares is because of its network effect. Being able to amass 180 million MAUs, 8.8 million drivers and couriers, and over 1 million merchants is no easy feat. And at this stage, Uber has become so valuable to all of its stakeholders that it’s difficult to see the business being disrupted.
Autonomous vehicles could pose a threat, especially if Tesla‘s robotaxis lower trip costs and become introduced worldwide. But Uber is positioning itself as a partner of choice for enterprises that are working on this tech. Uber’s advantage is that it’s the top aggregator of a massive pool of demand, not to mention the technical expertise it has running the platform. For a company in the space that wants to scale quickly, working with Uber is a smart choice.
Uber’s ongoing growth, profit potential, and network effect make it a sound investment.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.