Uber ( $UBER (+1,65%)
) – Very Much Alive
Since nothing is really going on that concerns the markets on a macro level, I’ll just continue running down my watchlist. These are two companies with great potential that I would buy on a pullback.
Let’s start with Uber. The company is mostly known for ride-hailing – though it’s far more than that. Uber operates on three pillars: mobility, delivery, and freight. Especially the delivery business, notably with Uber Eats, expanded its reach and matured into a serious cash generator rather than a side hustle. Uber Eats already commands a quarter of the food delivery market share in the U.S. The network is growing steadily, and the platform is “eating” into DoorDash’s business.
The main concern brought up by analysts just a few weeks ago – similar to Google – was that Uber operates in a dying industry. Ride-hailing was supposed to be devastated by Tesla and the almighty Elon, who would transform mobility forever. Nobody would use Uber, because it was outdated. Autonomous vehicles would destroy the business model. Based on all these overblown assumptions a low valuation was somehow “justified.” That’s the point where famous investor Bill Ackman bought in, and from there the stock only knew one direction: up.
I want to add to the point of autonomous vehicles taking over Uber’s business. That’s simply not true. Uber started a partnership with Waymo – which, unlike Tesla, has working cars – and this shows that autonomous vehicles could even benefit the platform. Providers like Waymo could strike exclusive partnership agreements with Uber and use its extensive network to leverage customer acquisition. That’s a net benefit, not a loss.
However, the stock is still trading at a rather cheap valuation, though for me, it would need to go back below $70 to be a compelling buy. Not unlikely, if economic fears continue to rise.
Micron ( $MU (+0,51%)
) – A Bet on Memory
When people think about AI hardware, they usually think about GPUs and other fancy products made by Nvidia. But here’s the thing: it’s not just about raw computing power anymore. The new trend is memory. High-bandwidth memory (HBM) has become the lifeblood of AI advancements. And guess what? There are only three companies on the planet that can produce these chips, and Micron is the upcoming champion.
Its chips are currently validated for Nvidia’s newest technology: Blackwell. This development is gold for Micron. The demand for its products is so high that the order books are completely filled and the company even has problems supplying everyone. Micron is growing aggressively, taking away market share from its competitors with superior products and a strong reputation that leads to high-profile deals – like the Blackwell one. But Micron isn’t stopping there. It is already developing chips for next-gen GPUs that expand memory pools in servers – perfect for inference.
If AI is the future, then memory is the oxygen it needs to survive. Since the business is inherently cyclical, though, I will wait for a broader pullback to buy into the company, possibly around $90.
