Tesla Stock vs Uber Stock! Which Stock Is Better?
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Today we have a chat about Tesla stock vs Uber stock and which one is a better investment long term. I am currently a shareholder of Tesla and I’m considering adding a position in Uber stock in a couple of months.
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Good day subscribers Hope you guys are having a great day out there. As always, today we’re gonna make two companies compete against each other. We’re talking Uber stock versus Tesla stock in what is the better investment in my personal opinion? All right.
Now first off, there’s going to be some people out there to say, Why even make these two companies compete? Why make Uber compete against Tesla, why even compare these two companies, they don’t compete it all today, okay. And so here’s our job as long term investors in the stock market, our job is to look around the corner.
Look around the corner and see who’s going to be competing with you in the future, who are going to be the massive competitors in different spaces. Two years from now, three years from now, four years from now, not just worrying about what’s going on today, if all you’re worried about is what’s going on today, you’ve already lost the battle, the battles and the wars that will be won in the future, all about what’s going to happen in the future.
Okay. And if I look around the corner, I’m seeing Uber and Tesla become two massive Goliath competitors, two years, three years, four years, five years from now, where a lot of people aren’t even looking at these two companies as competitors to.
I’m looking at these two companies, as massive competitors in the future. Okay, two of the most competitive companies in the entire transportation industry, in future years will be these two companies, in my personal opinion, okay, so I hope you guys enjoy this, we’re going to get into this in depth, who’s the better stock, which one has a higher likelihood of winning these different markets and whatnot.
So hope you guys enjoyed, as always, make sure to smash that thumbs up button. If you want to know the top five stock market apps and websites I use every day, go ahead and join our messenger. And we’ll go ahead and send that over to you in a PDF. Okay. So here’s what I’m thinking, here’s why these two companies are absolutely absolutely on a crash course to compete strictly against each other.
Okay? If we look out self driving, in my opinion, is about two to five years out, when I kind of look at where tech is at right now, what the self driving vehicles can do if you have a Tesla that has full autonomous mode as of right now and what that car can do and what not, if.
I’m looking at all the things that are out there, and way mo and those sorts of things, what I’m seeing is this technology is about two to five years away from full scale adoption, and most governments will start to allow this once it’s proven that it can be safer than an average driver, and especially safer than a good driver.
Now, why would governments want to allow this? Well, one, it would actually help out the economy in a huge way, traffic alone cost the economy a ton of money each year. And when you have accidents, the more more accidents. It’s not just about people getting hurt, or people actually, you know, like dying in a car accident. It’s not just about that.
But it’s about if somebody gets an accident on the highway, what happens the highway, it gets very congested traffic picks up, that actually hurts the overall economy. Obviously, the government wants the economy to do as well as possible so they can make more tax revenue and all those sorts of things, right.
So if you’re looking at this, from an economic standpoint, government would love self driving vehicles to already be here, not just because it would cut down injuries and deaths and whatnot, because it would actually help out the economy. When self driving vehicles and you have a ton of self driving vehicles on a road.
They’ll actually be able to follow each other much quicker, they will actually have way less accidents, because here’s the thing, you have like three tiers of drivers on you know, the roads on a given day, you have your bad drivers, which is a small percentage of the population.
But even if they’re a small percentage of the population, they are the type of people that are consistently an accident. So the type of people that are not very aware of what’s going on the road, the types of people that just follow other vehicles, they just put everybody in danger when they’re on the road. Okay, bad drivers, most people fall into the average category of drivers, meaning they can foresee some things, they’re pretty alert on the road.
But they’re not at a place where they can almost avoid all situations, there are some slip ups they can make once in a while there are some accidents they can create. And then you have the last category, which is a small percentage of drivers, which are really, really good drivers that are very alert on the road.
And they’ll pretty much never ever cause an accident in themselves. The only way they could possibly be involved in an accident is if they had no choice but to be in an accident because somebody like t boned him or something and it was completely out of their control. Okay, so as of right now, if I look at the current tech, and when it comes to autonomous driving and whatnot, we’re somewhere in between bad in average over the next several years.
I think we’ll get to a place where it will be even better than a good driver in the likelihood of you actually being involved in an accident is like eight or even less than if you are a really really good alert driver out there. Okay. And so if I’m looking at this, these two companies are on an absolute Crash Course with each other in the future.
Okay, Uber, Uber needs self driving vehicles so they can be profitable because as of right now is a company that is bleeding, a lot of money and a lot of the money on each Uber right actually goes to the driver themselves. Okay, so imagine if you cut out the middleman the driver in the vehicle drives itself No, Uber gets it itself into a place where it has a much more likelihood of making big, big profits on the back end.
Okay, so Uber absolutely needs self driving. So they can actually you’ll make a lot of money. Now it is possible Uber down the road couldn’t make money, even in manned vehicles, but I can tell you their likelihood of getting to massive profits, you know, explodes if we can get to a self driving vehicles sometime soon. Okay, so they need it for profitability reasons.
Tesla needs it for a couple different reasons. testani self driving vehicles, so they can really be the dominant auto sales company in the world. If Tesla wants to get to scale, where they are selling millions upon millions of vehicles, each and every year around the world, it can’t just be that the biggest electric vehicle maker we know ton of, you know, folks are coming on and competing in the electric space over the coming years.
But also, if they can actually be the ones that have the best autonomous driving out of all the vehicles out there, then you’re looking at something that puts a massive, massive competitive moat around the company, because it’s like, oh, it’s not just about Tesla being a cool brand. Oh, it’s not just about Tesla being electric. But these vehicles can literally drive themselves.
So that would put you into a situation where they have just a massive, massive competitive advantage over all their competitors out there. Okay. So they need that if they want to get to a place where they have really, really huge dominance sales, selling millions upon millions of vehicles a year. And they also have ambitions to have autonomous fleets.
Okay, so not only do they have their own vehicles that will basically be driving around and have an Uber like service, but just there’s no Uber driver in it. But also, you know, if you own a Tesla, like I do, you could actually add it to the fleet. If you were like, let’s say, all night long, you’re like, I don’t need my car for anything, that car can go drive people around, right?
You can go ahead and you say, Okay, I want people you know, to drive people around from midnight to 6am. And boom, there the car goes and goes and drives people around. Okay, so Tesla has huge ambitions in autonomous fleet. Uber obviously wants to get there for profitability reasons on a longer term basis. So there are two questions we got to answer now.
Okay, who will actually win this? Is it more likely to be Tesla? Is it more likely to be Uber and who has an actual better business as of right now, if we’re talking today, who has a better business? How are these two is Uber or is it tough? Okay, so let’s answer those two. Now. Already, guys. Now, let’s go ahead and chat about where these business models are right now.
Where’s Ubers? business model at right now? Where’s Tesla’s business model out right now? Okay. So as of right now, Uber is the number one or number two player in ride sharing service pretty much around the world, if you look at all the markets around the world, Ubers, usually the number one player in pretty much every single market you’d want to be in.
If they’re not, they’re usually the number two player, okay, that is massive, massive in itself, because that means most consumers out there are used to using this service to get transportation around, okay, especially if they don’t have a car, or they just need some supplemental ride. They’re very much in the habit of like getting an Uber ride, okay.
And for a lot of us in, you know, either United States or Europe, it’s become like pretty synonymous that if you like, even think about like, like getting a ride somewhere, you say, Hey, are you going to get an Uber ride there? Okay, it’s kind of almost become a brand name, like a Kleenex or something like that, right? It’s, oh, you’re going to get an Uber ride there.
It’s just what people say. And that’s amazing from a branding standpoint. And that’s amazing from a psychological standpoint, when you’re talking about consumers out there. Okay. Now, Tesla, they’re the number one player in electric vehicles, okay, they’re doing the biggest numbers by far when it comes to electric vehicles.
I mean, you look at their revenue numbers, they’re now doing multi billions of dollars of revenue each quarter, okay. And keep in mind, China is about to become a much bigger market for Tesla, because of the Shanghai Giga factory opening here in a few months. Okay. Now, Uber and Tesla, they do have other businesses to them, okay, they don’t just have these businesses.
But if you’re thinking about the core business of each company, for Uber, its ride sharing service. And for Tesla, it’s all about electric vehicles. Okay? So you’re looking at two companies that are very forward thinking are in are in the space that you want to be okay, ride sharing service, you would love to be the number one player in that right?
In electric vehicles, all vehicles are going electric in the future. And so if you’re the number one player there, it’s a very good thing. And when people think about electric vehicles, the first name by far in a way that comes to their mind is a test. Okay?
Just like the first name that comes to an average person, if they’re thinking about getting a ride somewhere is an Uber. Okay, so both these companies very big markets already, they’re going after, remember, they got other businesses they’re doing as well.
Okay, Tesla’s a little over $40 billion market cap as of right now, which is not too high when you kind of think about everything Tesla’s going for and everything they’re doing in the future. Okay. Uber on the other hands, a little over $60 billion market cap.
So you are paying about a 50% Premium roughly for basically buying Uber stock versus buying Tesla stock. And that’s something you got to think about which one of these has a bigger chance of success in the future at least has Right now Wall Street’s saying Uber because that market cap is obviously much bigger, but there are some individuals like myself as see Tesla as having this massive, massive opportunity in the future.
And believe, you know, a 40 plus billion dollar market cap is way too undervalued for this business. Okay? If we look at also where the businesses are at right now, Tesla has positive free cash flow for three of the past four quarters, and it is big for the business overall, okay, people will always have said, you know, they can’t get to a place with that positive free cash flow, they can’t get to a place where they’re going to be profitable.
They’re starting to approach levels, where they’ll likely be profitable, probably almost all quarters in 2020. And if they just cut back on spending a little bit here and there, if they could, you know, pretty much almost 100% for sure be a profitable company, they do have the ramp of model y coming in 2020.
And that is expensive whenever you ramp a vehicle in mass like they’re going to do, but if you’re looking outside of that is a company that would likely be profitable every single quarter in 2020, in some of those quarters, actually making some pretty good profits, okay, you look at Uber as a negative free cash flow company and on the bottom line, and if you’re looking at actual net income to comprehend losing mass amounts of money.
So if you’re thinking about which business is close to the profitability, which business is closer to, you know, always having a positive free cash flow, it is definitely Tesla over Uber as of right now, doesn’t mean Uber can get to profitability and can’t get to a place where they have very positive free cash flow in the future.
I’m just saying, if you look at it right now, the company that’s much much closer to getting to that place, it is Tesla, okay, it just you look at the numbers, and Tesla’s just been trending the right way in the right way, then you have model y coming, you have Shanghai Giga factory coming, all those things should produce much better likelihood that the company can reach profitability, okay.
Now, if you think okay, if these companies do continue to take losses over the coming years, like who’s got more funding connections? Well, both these companies have tons of funding connections, okay. Tesla has tons of funding connections. Ilan musk can raise money in any situation possible, he has connections to pretty much any investor, you want any bank out there you want.
Like, if Elan musk needs a few billion dollars, he can raise it in a snap of a finger. Okay, he even raised money, like during the recession and coming out of the recession. And that’s when raising money like the faucets were turned off during that time completely.
Okay, the man’s amazing when it comes to kind of like raising funding and whatnot, Uber, same exact thing. Ubers got plenty of connections, everybody wants to see Uber succeed. It’s a tech darling out of Silicon Valley, they have connections with anybody. So even if these companies took losses over the next few years, they have all the funding connections to get them through those losses.
Okay, now we’re going to talk about who will win the self driving in these are two very different philosophies for how they’re attacking this, okay, on one hand, you have Uber Ubers attacking this problem with basically trying to make partnerships we see them have a partnership with Volvo and whatnot.
Now, they’re trying to partner up with companies almost like outsource some of it and so they can have like ride sharing fleets in the in the future and self driving fleets in the future. But they don’t actually build the car, they just have some of the tech behind it and whatnot.
And they actually use other automobile manufacturers out there. Okay, so they have a philosophy of, we’re gonna partner our way to get there. And if you look at Tesla, it’s a completely different philosophy. Tesla’s completely in house, they’re saying, we want to build the car, we want to build the technology, when it comes to self driving, we want to build the electric batteries, we want everything.
And we’re going to actually operate the whole service network in itself, the autonomous fleet, we’re going to operate that Okay, so as Tesla’s looking at it, we’re gonna do everything in house, and Ubers, looking at it as we’re going to do some, but we’re going to partner with others to kind of help get us there.
Okay. And if I think about which one of these is probably a better philosophy, I believe it is Tesla, okay. And this is why I believe Tesla has a great likelihood of actually being the number one player when it comes to autonomous vehicles, because Tesla’s doing all this in house.
And if I look at the tech that Tesla actually has out there in the real world, right now, I’m not even talking about what they could have in two years from now, or three years from now, talking about what Tesla has in the market right now around fully autonomous vehicles and whatnot. If I look at their tech they have now it’s really unparalleled with any other auto manufacturer in the world.
And so if I think about that, where Tesla’s already at and how fast Tesla moves, and how fast they get things done, and then you take into account like the fact that there’s hundreds of 1000s, and potentially millions of Tesla’s getting on the road over the next coming years, and those vehicles will be, you know, at least partially on autopilot systems.
If not completely on autopilot systems, that’s going to get mass amounts more of data to Tesla to make the systems better and better and better at driving. And that’s how remember earlier we talked about tiers of drivers bad, average and good. That’s how Tesla likely over the next you know, year, two years, three years will get to a place where their vehicles are even better than good drivers.
Okay, so if I’m looking at this, I can definitely see Uber being successful there. I’m just thinking, I think Tesla actually has an advantage because of the mass amounts of vehicles in Dallas. Though the data they’re going to be able to collect is what will actually win them the battle when it comes to autonomous driving in the future, in my opinion.
So if I’m looking at these two stocks Ubers pretty interesting. Tesla at the end of the day is just more interesting not just because of where their business models at now, but the likelihood that they will actually win autonomous taxi networks you know, five years from now 10 years from now and when we think about that market you know.
It’s just it’s such a big market all around the world what that will end up being that it shouldn’t be overstated enough guys, so huge opportunity for both these companies. I think Tesla has more of an advantage. Let me know your opinion in the comment section.
I would love to hear from you guys. As always, make sure to smash the thumbs up button if you enjoyed today’s video. Thank you for watching. Have a great day.