It’s been a bumpy ride for Uber $UBER, which lost billions of dollars under founder Travis Kalanick, subsidizing rides to win users away from traditional taxi and car rental services. But it looks like under the leadership of CEO Dara Khosrowshahi, who arrived in 2017, the ride-hailing app is finally back in the good graces of investors—and riders.
Since cratering in mid-2022, Uber’s share price has boomed about 275%, as it sits on a firm three-quarters of the U.S. rideshare market and is finally making a profit on every ride. Q1 revenue of $11.5 billion was up more than 13% from a year earlier, and the bookings grew 18% year-over-year to $44.2 billion. Just three years ago, investors and Uber watchers were writing off the company — its market was saturated, lower-cost competitors were eating its lunch, and the company faced a slew of lawsuits over its employment practices. Here’s what’s made Uber rise again:
- Khosrowshahi put a focus on profitability ahead of expansion, with Uber making its first profit in five years in 2023, exiting unprofitable markets, and trimming promotional costs.
- Uber began working with Waymo and China’s WeRide to start using robotaxis. That hasn’t yet brought in a profit, but analysts see it as a preparatory step for future growth and a hedge against Tesla’s robotaxis.
- Maybe the biggest single boost Uber got was being added at the end of 2023 to the S&P 500. That nearly always boosts a stock’s price, as it means institutional investors and popular index-tracking funds need to buy the stock.
- Then there’s Bill Ackman, whose Pershing Square Capital Management took a $2.3 billion stake in Uber this month, with Ackman calling the stock undervalued. JPMorganChase analysts this week raised their price target from $92 to $105, citing Uber’s progress toward its three-year goals, including mid-to-high teens percentage growth in gross bookings and a 35%–40% increase in EBITDA. Uber is one of the cheapest big stocks compared to its bottom line, trading at 24.17 times its free cash flow, a fraction of other notable technology stocks like Tesla (397 price-to-free-cash-flow), Palantir (168) and Nvidia (62). Uber generated $6.9 billion in cash in 2024, more than double its $3.4 billion in 2023.
Watch Big Business This Week on Cheddar—and YouTube!
The Usual Suspects
- OpenAI buys Jony Appleseed: It’s a race to get your AI model into the hands of consumers, and Sam Altman’s industry-leading OpenAI took a look at the landscape and decided they’d prefer to own the next ubiquitous AI device rather than pay someone else billions a year to carry his Chatbot on their device. (Much like Alphabet’s been paying Apple $AAPL to make Google the main search engine on the iPhone.) Altman didn’t look far. He’s just paid $6.5 billion for io, a year-old company created by Jony Ive, the man credited with designing the iPhone for Steve Jobs. Io is developing (behind a curtain) the next generation of tools designed around AI. “It became clear that our ambitions to develop, engineer, and manufacture a new family of products demanded an entirely new company,” Altman and Ive said in a blog post that looks a lot like a Paperless Post wedding invitation. Three cheers for the happy couple!
- Google’s dilemma: Alphabet’s $GOOG Google this week unveiled a raft of new AI tools in a bid to recover users and searches it is losing to AI chatbots like ChatGPT and Grok. There’s now an AI-mode on its search page, but gone are many of the blue links, which provided most of Google’s revenue (57% last year), and its future looks murky. After an Apple executive said last week that his company would begin offering AI options, Google’s shares slid 7.3%. “It’s a total reimagining of search with more advanced reasoning,” said Alphabet CEO Sundar Pichai. “We are now entering a new phase of the AI platform shift.”
- Meta-bollicking: Mark Zuckerberg is not happy, so Meta $META is telling managers to fire more people. How? By ensuring they put more people in the “below expectations” bucket at their mid-year performance reviews. Business Insider says it saw an internal Meta memo saying the boss wants teams of 150 people or more to put 15% to 20% of their members in that slop bucket.
- Nvidia’s no longer feeling Nvincible: Jensen Huang, the leather-jacket-wearing founder of chipmaker Nvidia $NVDA, says rules meant to maintain America’s lead in the AI race by curbing China’s access to his company’s advanced AI chips have had the opposite effect. Now Chinese tech firms like Huawei have filled the gap with their own chips. The export controls gave Chinese companies “the spirit, the energy and the government support to accelerate their development,” Huang said at a Taipei conference this week. “All in all, the export control was a failure.”
- Missed Target: Target $TGT missed expectations for sales in the most recent quarter as sales fell 3.8%, and the retailer said it expects sales to fall by single digits this year. Tariffs are only part of the problem: Consumers are losing confidence in the economy, and some shoppers are boycotting Target over its decision to end DEI programs. Target has been losing ground against Walmart and Amazon for years, trailing Walmart’s growth for the last 13 quarters. The company says it will create an “acceleration office” this year to speed up changes and win back customers. Interestingly, Amazon $AMZN CEO Andy Jassy said Wednesday that the company hasn’t seen any signs of consumers tightening their wallets in the face of President Donald Trump’s sweeping tariffs.
- Penalties with interest: Capital One $COF agreed to pay $425 million to settle a class action lawsuit arguing that it cheated depositors out of higher interest rates by failing to let them know about high-interest savings accounts the bank offered. Standard accounts offered a 0.3% interest rate, while high-yield accounts offered as much as 4%. Cap One did not admit responsibility. A similar suit brought by the Consumer Financial Protection Bureau was dropped by the Trump Administration, but two days earlier, N.Y. state attorney general Letitia James brought a similar suit.
Want to get smarter about financial markets?
Join 200,000 investors who get Opening Bell Daily in their inbox — it’s packed with Wall Street data, charts and analysis you won’t find anywhere else. Subscribe free!
Elon’s World
- Vanishing value: Tesla $TSLA has backed off its no-trade-in policy for the Cybertruck, and some owners tell Business Insider they’ve lost 37% to 38% of the value of their stainless steel mojo-mobiles in less than a year, Business Insider reports. Kelley Blue Book notes that on average, new cars lose 16% of their value after their first year.
- China syndrome: Right-wing troublemaker Steve Bannon tells the Atlantic it all went south for Elon in Washington when Trump said there’d be no China briefing for the DOGE man. “You could feel it. Everything changed. The fever had been broken,” Bannon told The Atlantic.
- Castles in the sand: That trip to the Gulf states was a great deal for Elon Musk. Musk’s X ventures secured several contracts, including approval to operate its Starlink satellite internet service in Saudi Arabia, a clinical study to test his Neuralink brain chips in Abu Dhabi, and a possible contract to provide Starlink to Emirates Airlines. Musk’s family is also doing business in the Gulf. Dad Errol Musk is in talks to build a Musk Tower in Dubai to house the Musk Institute, which the elder Musk told the New York Times would be devoted to studying “gravity and space-time travel.”
- What, me worry? Musk told a conference in Qatar that Tesla’s sales and share price are fine, despite ample evidence to the contrary. “Sales numbers are strong, we see no problem with demand,” Musk said, adding that the market is the ultimate scorecard for Tesla’s business. “You can just look at the stock price if you want the best inside information,” he said. “A stock wouldn’t be trading near all-time highs if it was not, if things weren’t in good shape. They’re fine, don’t worry about it.” Tesla shares are down 30% from an all-time high last December, and down 10% this year, despite a recent rebound, and first-quarter car sales dropped 13% over 2024.
- Caddy-attack: EV buyers are trading in their Teslas for new Cadillac EVs, says General Motors $GM. Nearly 8 out of every 10 customers purchasing a Cadillac EV are new to the brand, and about 10% of those customers are trading in a Tesla.
Get Big Business This Week in your inbox every week—and read it before everybody else! Sign up today.
Trumplandia
- Pulling the plug: The U.S. Treasury is now singing the Moody’s blues. On Friday, Moody’s, the credit rating company, cut the U.S. government’s debt rating a notch, from AAA to Aa1, saying it “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.” The key word there is “ratios.” That means that as spending is inevitably increasing, revenue is not. In effect, if the government wants to keep spending, it needs a pay raise. The one thing it doesn’t want to do is take a pay cut. But that’s the net effect of the Trump tax cuts from term one, the tariff turmoil that’s cut economic activity (and therefore tax collections), and the “Big, beautiful bill” that increases tax breaks for the rich and that just passed the House of Representatives. The Moody downgrade hit hard on Monday, when bond markets saw a rapid sell-off in 30-year Treasury bonds, whose yields jumped to their highest level since 2023. “I think that Moody’s is a lagging indicator,” Treasury Secretary Scott Bessent said Sunday. “I think that’s what everyone thinks of credit agencies.” There are multiple ways to interpret that statement, but none of them suggest the economy will boom anytime soon. One thing the downgrade does mean is that even more taxpayer money will have to be spent on interest on the debt. And that’s got one of America’s most prominent business voices worried. JPMorganChase CEO Jamie Dimon said the risks of higher inflation and even stagflation posed by record U.S. deficits, tariffs, and international tensions aren’t priced into the stock market. “We have huge deficits; we have what I consider almost complacent central banks,” Dimon said. “You all think they can manage all this. I don’t think they can,” he said. “People feel pretty good because you haven’t seen effective tariffs,” Dimon said. “The market came down 10%, [it’s] back up 10%. That’s an extraordinary amount of complacency.”
- Suck it up! When Walmart said it was going to pass the cost of tariffs on to its customers, Donald Trump got himself in a huff: “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump fumed on his social media platform, that occasionally sounds more like Truth Socialism. “ Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!” Walmart’s gross profits rose 7.12% in the past year. About a third of Walmart products are imported, the vast majority from China and Mexico.
- Star Wars, the Sequel: Trump said Tuesday the U.S. will spend $175 billion on a space-based defense system aimed at blocking missiles from China and Russia, which he dubbed the “Golden Dome,” a reference to Israel’s Iron Dome anti-missile defense system. Trump said it will be finished within four years, but experts say it will take twice as long and cost as much as $831 billion. Whether or not it succeeds, defense contractors are poised to win big contracts, and names mentioned include SpaceX, Palantir $PLTR, L3Harris Technologies $LHX, Lockheed Martin $LMT, and RTX Corp $RTX. Ronald Reagan attempted a similar project in the 1980s called Star Wars, but it was cancelled after the U.S. and Russia agreed to avoid an expensive arms race in space.
- Audit this: Trump’s pick to lead the IRS sold his friends a tax break that the IRS said does not exist, and Democratic senators at his confirmation hearing this week went to town. Former Missouri congressman Billy Long offered his customers a “tribal tax credit” linked to oil and gas. “I did not indicate that they were anything but real,” Long told Senators on Tuesday. And it’s there’s more trouble ahead: Sen. Ron Wyden, an Oregon Democrat, said he’s got recordings of Long promising favorable tax deals for friends of Trump.
The Short Stack
- Media notes: Paramount’s $PARA CBS division sacked CBS News chief Wendy McMahon after she disagreed with the company’s move to settle a $60 billion lawsuit brought by Trump, who accused “60 Minutes” of selectively editing an interview with Kamala Harris. Legal experts call the suit baseless, and Trump beat Harris at the polls anyway, so what’s his beef? But Paramount needs the FCC’s blessing to sell itself to Hollywood studio Skydance, run by Oracle $ORCL founder Larry Ellison’s son David.
- Sesame stream: As the Trump administration moves to cut all funding from public broadcasting, Sesame Street has reached a deal with Netflix to syndicate the show and launch new episodes simultaneously with PBS. Since 2015, HBO has paid Sesame Workshop $30 million to $35 million a year for new episodes of “Sesame Street,” The New York Times reported. But HBO parent Warner Bros. Discovery $WBD let that deal expire as it turns away from children’s content and faces its own financial issues. Warner shares are down 16.5% so far this year.
- $256MillionandMe: Failed DNA fortune-telling firm 23andMe said it has agreed to be bought by Regeneron Pharmaceuticals $RGN, a biotech company that uses DNA research to develop new drugs. 23andMe became a household name as Americans got their saliva tested to learn who their parents were and where they’d come from. But it ran rapidly through its potential customer base and offered nothing for a returning customer. It tried to use the genetic data to develop its own drugs, but that failed and the company filed for bankruptcy protection. Regenoron says it will still collect valuable new data for free by continuing to offer DNA testing.
- Airbnb, begone: Facing one of Europe’s worst housing crises, the Spanish government ordered Airbnb $ABNB to take down nearly 66,000 listings in the country, as an increasing number of Spaniards rent their homes—or sell them to companies that rent them out—to tourists. Airbnb says the Spanish government needs to look for the cause of its housing crisis at home: “The solution is to build more homes — anything else is a distraction,” the company said in a statement.
- Fortnite’s back! Apple reinstated Fortnite in the App Store after a federal judge ruled it coudn’t force developers to use Apple’s $AAPL costly payment system. Fortnite owner Epic had sued back in 2020, after Apple booted it from the ecosystem when Epic told customers to pay it directly rather than accepting Apple’s 30% sales commission.
- Sweet: Medical device maker Medtronic’s $MDT diabetes business has been lagging for several years, as new drugs, cheaper pumps, and a federal freeze on insulin prices slashed margins. Safety issues led it to delay selling a new insulin pump. Now it’s spinning off the diabetes business into a standalone company. “These are higher-margin markets than the diabetes space, and they better leverage our core strengths as a company,” said CEO Geoff Martha.
Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
