Uber Technologies Inc (NYSE:UBER) shares rose by as much as 3.2% in the pre-market hours after the company announced a strategic partnership with Nvidia Corp (NASDAQ:NVDA) to fast-track autonomous driving technology development.
This collaboration will aid Uber fulfil its ambition to remain at the forefront of innovation in the competitive autonomous vehicle (AV) market.
“Generative AI will power the future of mobility, requiring both rich data and very powerful compute,” Uber Chief Executive Dara Khosrowshahi said in the news release.
“By working with NVIDIA, we are confident that we can help supercharge the timeline for safe and scalable autonomous driving solutions for the industry,” he added.
The partnership leverages Nvidia’s Cosmos platform and DGX Cloud, coupled with data from millions of Uber’s daily trips, to enhance AI model development.
Nvidia Cosmos, designed to minimize costs and resource constraints in physical AI system development, is particularly valuable for applications like autonomous vehicles.
The DGX Cloud, meanwhile, offers a high-performance, managed AI platform that streamlines model creation across multiple cloud environments.
Norm Marks, vice president of automotive at Nvidia, expressed enthusiasm about the collaboration, stating that Uber is among the first mobility leaders to adopt these platforms.
This partnership is expected to empower the AV ecosystem with advanced tools and platforms, with further details to be shared later in the year.
Uber takes strides in AV but investors remain skeptical
Uber’s partnership with Nvidia aligns with its broader strategy of collaborating with autonomous vehicle (AV) developers rather than owning and operating its own AV division.
The company exited direct development of autonomous technology by selling its AV unit in late 2020, choosing instead to position itself as a platform partner for AV innovators.
This approach has led to strategic alliances with industry leaders like Waymo, Google’s self-driving car division.
Uber already integrates Waymo vehicles into its platform in Phoenix and plans to expand this partnership to Austin and Atlanta next year.
Additionally, the company recently introduced robotaxis to its app in Abu Dhabi through a collaboration with Chinese mobility firm WeRide (WRD).
Despite these initiatives, investor sentiment around Uber’s AV strategy remains mixed.
Concerns about the broader implications of AV adoption on Uber’s business model have created market volatility.
For instance, Uber shares declined after Waymo announced its expansion to Miami using its own app rather than partnering with Uber.
Similarly, progress updates from Tesla (TSLA) on its robotaxi service over the past six months have often pressured Uber’s stock.
Uber’s shares have faced headwinds in recent months, with the stock losing 25% from its October high of $87.
This reflects broader market skepticism about how Uber will navigate the competitive and disruptive AV landscape.
While its strategy of partnering with AV developers positions it to leverage innovation, investors remain cautious about the long-term implications for Uber’s ride-hailing dominance and financial performance.
Uber stock 2025 rally
Despite investor skepticism, Uber is starting 2025 strong, rallying 10% so far this month to retake stock’s 21-day moving average.
Further gains Tuesday could have Uber test support for its longer-term 50-day moving average.
According to Investor Business Daily, overall, Uber has an IBD Composite Rating of 69 out of a best-possible 99, according to IBD Stock Checkup.
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating.
The best growth stocks have a Composite Rating of 90 or better.
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