Uber Technologies (UBER -1.04%) has had a phenomenal year. As of July 9, shares of the mobility and delivery platform are up 60% in 2025. At the same time, the S&P 500 Index has climbed just 6%.
Uber is now valued at over $200 billion, showcasing just how successful this business has become. It’s certainly understandable if investors fear that they might have missed the boat on this investment opportunity. However, it’s best to remain optimistic.
Here are three reasons Uber stock still looks like a smart buy.
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1. It’s not done growing
Uber now has a presence in more than 15,000 cities. In the first quarter (ended March 31), it generated $11.5 billion in revenue. And it now has 170 million monthly active users.
But the business is not even close to reaching its full potential. The growth machine is still firing on all cylinders.
Uber’s gross bookings, for both the mobility and delivery segments, are increasing at healthy double-digit rates. This demonstrates robust demand for its services. Wall Street consensus estimates call for revenue to increase 15% in 2025, 15% in 2026, and 13% in 2027.
Management believes some areas can drive continued expansion in the years ahead, mainly by targeting a bigger audience, boosting the frequency of use, and driving sign-ups for Uber One membership.
2. It has key competitive strengths
Another reason to buy shares is the presence of powerful competitive advantages. The company benefits from a network effect, underscored by the fact that the service gets better as it becomes larger.
More drivers and restaurants add more value for consumers. And with greater demand from riders, drivers can make more money, while spending less time sitting around idle.
The network effect gets a lot of attention. But investors can’t forget about a powerful intangible asset the company benefits from, which is the huge amount of data it’s able to collect.
This is true for other platform and internet businesses whose stakeholders interact with their products and services frequently. In Uber’s case, it can leverage the data it collects to better match drivers with riders, provide recommendations, and offer targeted promotions.
The business has also spawned an entirely new revenue machine thanks to its data. In the second quarter of 2024, it was reported that Uber generated $1 billion in annualized run-rate revenue from advertising.
This access to data could also be the main reason many autonomous vehicle (AV) companies are choosing to partner with it. The company understands demand trends, dynamic pricing, and route optimization, for instance, which can help AV partners scale up.
3. What about Uber’s valuation?
Warren Buffett, arguably the greatest investor ever, who has helped produce a compound annual return of nearly 20% at Berkshire Hathaway over the past six decades, views valuation as a core investment tenet. Don’t overpay for a business. The best investment opportunities can be found when shares in a high-quality company trade at an attractive valuation.
This view is straightforward. If you pay too high a valuation, it creates a hurdle to achieving strong returns. In other words, elevated expectations introduce downside risk should the business report disappointing financial results and/or the market loses enthusiasm.
Given Uber’s 60% rise in 2025, with the stock trading in record territory, it’s safe to say that the investment community is optimistic about this company. It’s natural to wonder if it’s too late to buy.
However, shares can be purchased at a forward price-to-earnings ratio of 26.4. Sure, that’s not as cheap as the stock was at the start of this year, but it’s a decent valuation to buy shares.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Uber Technologies. The Motley Fool has a disclosure policy.