What Happened?
Shares of ride sharing and on-demand delivery platform Uber (NYSE: UBER) jumped 3.3% in the morning session after the company announced a strategic partnership with Israeli drone company Flytrex to launch a drone-based delivery service.
This move marked Uber's return to aerial delivery. The agreement meant Uber Eats would pilot the service in certain U.S. markets before the end of 2025. Unlike a previously abandoned attempt, Uber now benefited from Flytrex's experience and existing FAA approval for its drones, which had already completed more than 200,000 suburban deliveries. The service promised faster drop-offs and less road congestion. In other news, Uber also prepared to launch luxury helicopter hops on the French Riviera through a partnership with Joby Aviation. This wave of positive developments helped push the company's shares past $100 for the first time since its public offering.
After the initial pop the shares cooled down to $100.73, up 2.3% from previous close.
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What Is The Market Telling Us
Uber’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 2.9% on the news that the stock's positive momentum continued as the company announced its first venture into drone delivery through a new partnership with Flytrex. The deal set the stage for a drone delivery service, expected to launch on Uber Eats in U.S. pilot locations by the end of 2025. Uber's leadership described the move as entering the 'next chapter' of autonomous technology, aiming to create more cost-efficient last-mile logistics. This strategic step into a new delivery frontier was met with positive sentiment on Wall Street. Analysts at Raymond James boosted their price target on the stock to $105.00 from $100.00 and maintained a 'strong-buy' rating. The partnership aligns with a bullish outlook for the broader ride-hailing industry, which research firm Mordor Intelligence projected would grow at an average annual pace of 16.6% through 2030.
Uber is up 59.5% since the beginning of the year, and at $100.73 per share, has set a new 52-week high. Investors who bought $1,000 worth of Uber’s shares 5 years ago would now be looking at an investment worth $2,928.
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