On August 24, Citizens analyst Andrew Boone reiterated a Market Perform rating on Tesla (NASDAQ: TSLA) and Market Outperform on Uber Technologies Inc (NYSE: UBER) with a $100 price target. The rating reaffirmation follows news that state regulators have granted permits to Tesla, Uber subsidiary Aviari Services and Waymo to operate robotaxi services in the state.
Also, Uber has launched its first European autonomous robotaxi service through its app in Zagreb. Uniting autonomous firm Pony.ai and the local fleet operator Verne, Pony.ai will be supplying the autonomous driving system while Verne will serve as own and operate the fleet.
The News
The Nevada Transportation Authority (NTA) has authorized the three tech companies to operate as Autonomous Vehicle Network Companies in Nevada. Under the approvals, each company is to provide paid passenger transportation in fully autonomous vehicles within Clark County. This is subject to the operational design domain and other conditions approved by the Authority.
A closeup of a self-driving hardware unit inside the dashboard of a passenger vehicle.
The authority has permitted Tesla a fleet of up to 5,000 fully autonomous vehicles during the first 12 months following issuance of its permit, while Waymo and Uber are each authorized for up to 1,000 fully autonomous vehicles during their respective first 12 months.
While this is good news for these companies, taxi and livery operators have since pushed back. They have warned of the dangers of oversaturation and congestion in the “Golden Triangle” between the airport and the high-traffic Las Vegas Strip. This implies that Tesla and others will still have to prove to regulators, local officials, and competitors in Clark County and other localities that their vehicles can run safely without anyone in the driver’s seat.
The Bull and Bear Case for Tesla
Telsa’s Nevada robotaxi approval fuels optimism for commercial cybercab scaling, allowing the company to scale once it chooses to.
However, investors should know that the 5,000 vehicle approval is a ceiling and not a forecast. According to Cybercab chief engineer, the company anticipates to field around 2,500 within the year.
“The 5,000 has always been a ceiling for us,” the engineer said, according to TechCrunch.
This is a meaningful gap, and it seems investors aren’t yet convinced that the deployment pace will catch up to deployment ceiling.
The Bull and Bear Case for Uber
Uber works differently than Tesla and doesn’t develop robotaxis itself. Since it doesn’t need to develop the technology itself and only aggregates the supply from partners, it diversifies its risk from any single provider. It also supports Citizens’ expectations that autonomous vehicle commercial supply will materially ramp on Uber’s platform in the fourth quarter of 2026 and through 2027. Analyst Andrew Boone also noted that Uber’s partners are continuing to make progress.
The bear case for Uber is that the Zagreb launch, the company’s first European autonomous robotaxi service in Zagreb, still requires a licensed safety operator behind the wheel. This means that the fully autonomous version story for Uber Zagreb service hasn’t officially begun yet.
Hedge Fund Analysis
Insider Monkey’s database shows hedge funds modestly dropping from 123 in Q1 2026 to 116 in Q2. For Uber, hedge fund holdings have been stronger with 151 holding positions in the second quarter. However, the stock lost two hedge fund positions from the last quarter as well.
Tesla trades at a massive premium valuation that assumes that the company can turn its robotaxi fleet into an autonomous ride-hailing network. Investors price the company like a high-growth tech and AI Company rather than a traditional car manufacturer.
Meanwhile, Uber trades at a discount because its earnings multiples sit below the broader transportation industry and peer averages.
Overall, the Nevada approval makes the robotaxi thesis more credible. However, since the authorized fleet sizes are merely ceilings, investors are yet to see how much of those numbers the two companies will fill.
READ NEXT: NVIDIA (NVDA): What Foxconn and Super Micro Are Telling Us about the AI Boom and Snowflake (SNOW) Stock: AI Growth Is Real, But Is the Valuation Already Priced In?
Disclosure: None. Follow Insider Monkey on Google News.
