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Autonomous driving will be Uber's 'big win': analyst

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Big Wall Street banks came out in full support of Uber (UBER) Tuesday morning, now that the IPO quiet period has ended.

A slew of analysts issued Buy ratings on Uber stock. Out of the 25 analysts rating Uber, none of them said to Sell the stock.

“They're disrupting delivery of goods to your home, they’re disrupting personal transportation,” Loop Capital Markets Managing Director Jeffrey Kauffman told Yahoo Finance’s On the Move. “The big thing here on Uber that's not being talked about very much is the move to autonomous and self-driving vehicles. We think you're going to see this sometime in the next three to five years. That's going to be a very big win.”

Uber has poured money into Advanced Technologies Group’s work on autonomous driving — nearly $1.1 billion since 2016. Ahead of its IPO, the company said that self driving vehicles are the future of transportation.

Diversity pays off

Kauffman unerscored that there’s so much more to Uber than just ride-sharing. Loop Capital Markets, which is Neutral on Lyft stock, expects a compound annual growth rate of 20% for ride share.

“When we look at Uber it’s not just ride share, it's the move into restaurant delivery, home delivery. We see that growing at a 47% rate,” said Kauffman. “The move into freight as well. We see that growing at a 54% rate. It’s a diversified play. There’s more ways to win here ”

Kauffman compares Uber to Amazon, which had years of losses when they invested in its digital network. Uber reported a $1 billion loss in its latest earnings report as the company spent heavily to build up its food delivery and freight businesses.

“Yes we’re in a period of heavy investment here,” he said. “We expect to see heavy losses but we think it will dissipate in two years.”

Valentina Caval is a producer on Yahoo Finance’s On the Move.

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