Title: Portfolio Update (UBER)
Show: Haymaker (Substack) — written post
Guest: David Hay / The Haymaker Team
Date: 2026-06-08 (PAID)
URL: https://haymaker.substack.com/p/portfolio-update
Length: written post (no timestamps)
Note: Verbatim body of the written post; no audio/timestamps.

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Uber Technologies (UBER). Position initiated: January 12, 2026 (~$84).

Where We Stand — When we recommended UBER in mid-January, the thesis was straightforward: one of the world's great businesses, generating nearly $10 billion in annual free cash flow and growing earnings at 44% year over year, was being priced by the market as though it faced existential threats. (In fact, that perception hasn't really changed.) The stock was roughly $84/share and a very modest 3.4x sales. We believed the market had grown overly bearish on UBER and it was due for a rebound. Well, that obviously hasn't happened yet. However, we still strongly believe in both the company and the thesis. As the legendary Stanley Druckenmiller recently espoused on Morgan Stanley's Hard Lessons podcast: "I like it when I have extreme conviction in a thesis and no one else believes it. It gives me even more conviction." That perfectly sums up our opinion on UBER.

What the Business Has Done Since January — Business trends have been excellent. Q4 2025 revenue grew 20% YoY, with free cash flow growing 42%. Q1 2026 confirmed the trajectory, as gross bookings grew 21% for the third consecutive quarter and the CFO described earnings scaling at more than twice the topline growth rate. Forty-six million Uber One members are now driving half of all gross bookings and growing at 55% annually. The high-margin advertising business crossed $2 billion in annualized revenue growing 50%+. A partnership with Expedia was announced in April allowing 202 million monthly active users to book hotels directly through the app, marking the first tangible step toward a travel super-app that competes structurally with Amazon Prime. The Munich robotaxi test with NVIDIA and Autobrains went live this week. WeRide and Uber launched Spain's first commercial robotaxi pilot in Madrid. Autonomous operations now span Riyadh, Abu Dhabi, Austin, Atlanta, and a growing list of international cities. Every financial metric that existed when we made the recommendation has improved.

What the Market Has Focused on Instead — The stock has moved lower because three narratives have dominated. First, the Delivery Hero situation (the German equivalent of DoorDash): Uber has increased its stake (now 24.99%) and explored a full acquisition; the market prices this as a dumb use of money, but Delivery Hero's Talabat subsidiary dominates food delivery across nine Gulf Cooperation Council countries (UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, Jordan, Iraq, Egypt, Oman) — the same markets where Uber has a signed Vision 2030 AV partnership with the Saudi Transport General Authority and live robotaxi ops in Riyadh and Abu Dhabi through WeRide; owning both the AV platform and the dominant food network = a Gulf super-app. Second, "Waymo kills Uber": Waymo announced 500,000 weekly rides vs Uber's ~24 million daily ride-hailing trips (>300:1; even at Waymo's 1M weekly target, ~170:1), but Waymo's own data shows 30% higher utilization when dispatched through Uber's network vs its standalone app; Uber also deploys its own AV supply via the Lucid-Nuro partnership in San Francisco. (Related: the belief Tesla will dominate AI and marginalize Uber — yet Tesla's AV service is still in testing with ~60 fatalities attributed to its autopilot, vs zero driving deaths from Waymo tech failure; a cooperative relationship seems more probable.) Third, cost management: Uber capped AI usage spending after exceeding budget and announced job cuts in its People and Places division — evidence of discipline, not distress, for a company generating $9.8B annual FCF.

Does the Market Have It All Wrong? — AVs are framed as an existential threat; the operational data proves the opposite. A self-driving car sitting idle earns nothing; utilization is the entire economics of the AV business. A Waymo vehicle dispatched through Uber's network (202M MAUs, 40M daily trips) achieves 30% higher utilization than via Waymo's standalone app. As AVs replace human drivers, the ~70%-of-fare driver compensation increasingly stays with Uber: on $193B annual gross bookings, moving 20% of trips to AVs at an 80% take rate (vs 28% now) adds ~$20B incremental annual revenue at full scale. Uber's $10B AV commitment across 14+ partners (Waymo, WeRide, Pony.ai, Lucid-Nuro, Wayve, Waabi, Baidu) is a toll booth on every autonomous trip. Uber Autonomous Solutions (launched Feb 23, 2026) is a white-label suite (fleet management, proprietary training data from 40M daily trips, remote ops, AV insurance) for WeRide, Pony.ai, Wayve, Waabi, Baidu — the training data is a compounding asset.

What the Valuation Says Today — More attractive at ~$70/share: 18x trailing FCF, $9.8B FCF growing 42%, PEG 0.64. SOTP DCF fair value $110–130; ex-AV the core platform + advertising alone is ~$95–108 at conservative peer multiples. 45 of 46 analysts maintain Buy; consensus target $104.45; Morningstar DCF FV $97. We are maintaining our Buy recommendation on UBER.

[IBM action] — Another action item relates to IBM, which we brought to your attention a couple of years ago. It has moved opposite to UBER — up ~50% since our January 29th, 2024 highlight (despite retreating 14% lately off a spike peak last week). Big Blue is not the bargain it once was; it's trading at the highest valuation in the last decade — Price/Sales and P/E the loftiest in 25 years. Accordingly, we're moving it to a Sell and pulling it off our Hold/Trim list. For one thing, we'd like to raise more cash given ominous signals the overall stock market has been producing of late; another goal is to track fewer names and concentrate on our best ideas. With UBER at 18.6x 2026 estimated earnings vs 22 for IBM, we think the former is a better destination for your capital should you prefer not to build cash — but cash is definitely not trash. — The Haymaker Team