Uber Technologies Inc. faces mounting challenges following the breakdown of its robotaxi partnership with Alphabet Inc.’s Waymo, casting uncertainty over the ride-hailing giant’s longer-term growth prospects. The dissolution of the alliance has contributed to a notable decline in Uber’s share price, which has fallen roughly 28% since hitting a record high in October, while broader market indexes like the S&P 500 and Nasdaq 100 have posted gains of 13% and 15%, respectively, over the same period.

Investors and analysts emphasize that sustained confidence in Uber’s stock will depend heavily on the company’s ability to demonstrate progress in its autonomous vehicle initiatives. Although Uber continues to perform well in its core mobility and delivery segments, the market is increasingly skeptical about the company’s capacity to leverage self-driving technology to expand its ride-hailing service. “A durable recovery requires Uber to address the structural question head-on,” said Dave Mazza, CEO of Roundhill Financial, referring to the company’s autonomous vehicle strategy. He added that tangible deployment metrics, rather than optimistic statements, are critical in convincing investors of Uber’s prospects.

Uber has partnered with several firms developing autonomous driving technology, including Nuro Inc. and Amazon’s Zoox, but its previous exclusive robotaxi arrangement with Waymo was viewed as particularly valuable due to Waymo’s leading position in the self-driving sector. The partnership began to unravel in June when Uber ended the robotaxi collaboration in Phoenix. Further uncertainty arose in late July when reports indicated Waymo was exploring options to exit its exclusivity with Uber, triggering a 4% drop in Uber’s stock that day.

Market watchers note that Waymo’s move could heighten competition, especially in urban markets where Uber has traditionally maintained strong pricing power. Morningstar analyst Mark Giarelli reduced his valuation of Uber shares partly on these concerns, reflecting the emerging challenges from Waymo’s potential independent expansion. However, Mazza of Roundhill Financial believes the economics still favor Uber’s platform model unless companies like Waymo can demonstrate their ability to operate profitably without linking to a centralized ride-hailing service.

From an operational standpoint, Uber’s CEO Dara Khosrowshahi has pointed to “very, very healthy trends” in key markets such as San Francisco, where Waymo has been active. Nevertheless, Waymo currently operates a fleet of more than 3,000 vehicles in over 10 U.S. cities—a scale that remains small compared to Uber’s extensive taxi network.

Uber’s recent stock weakness occurs amid a broader investor retreat from high-growth, technology-driven companies, especially those with ambitious but still unproven business models. Unlike Waymo’s backer Alphabet or Meta Platforms Inc., Uber has kept artificial intelligence investments relatively modest, avoiding the sharp criticism faced by firms with heavy capital expenditures. Still, Uber must validate its strategy by translating autonomy-related efforts into sustainable profitability.

Despite the stock’s recent decline, Uber trades at about 18 times forward earnings, below the S&P 500 average of 20, a valuation some interpret as limiting further downside. Wall Street sentiment remains broadly positive: out of 58 analysts covering Uber, approximately 86% have buy ratings, contrasting sharply with the more cautious outlook toward competitor Lyft Inc.

However, analysts have adjusted expectations for Uber’s near-term earnings, with 2026 profit estimates falling by more than 17% over the past year. Haris Khurshid, chief investment officer at Karobaar Capital, which holds Uber shares, noted that this reflects growing patience among investors about the timing of returns rather than doubts about the company’s fundamental business.