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Amazon: A Stock Worth Considering

There’s no denying it: Amazon has emerged as one of the most remarkable success stories in modern investment history. Since its public offering in 1997, Amazon’s stock has surged approximately 300,000%. While it may be unrealistic to expect such astronomical growth over the next 30 years, the company’s robust expansion into cloud computing keeps it positioned as one of the market’s most enticing investment opportunities today.

The Case for Uber Technologies

Despite Amazon’s impressive trajectory, there’s another compelling growth stock to consider for your portfolio: Uber Technologies (NYSE: UBER). Here’s why investing in Uber may yield even better returns in the future.

Disrupting the Ride-Hailing Industry

While Uber’s founders, Travis Kalanick and Garrett Camp, are not the original creators of ride-hailing applications, they are largely credited with popularizing the concept. The ride-hailing market is still expanding as a preferable mobility option for many consumers. With 20% revenue growth reported in the third quarter, Uber is not only building on a well-established trend but also becoming increasingly profitable.

UBER Revenue (Quarterly) data by YCharts

Analysts anticipate a sustained growth in both revenue and profits for Uber over the coming years.

Data source: StockAnalysis.com. Chart by author.

Underlying Cultural Shifts Favoring Uber

While the financial numbers support Uber’s growth, a more significant aspect to consider is the underlying cultural shift contributing to this upward trajectory: fewer people are opting to own vehicles or even pursue a driver’s license. This is more than just a passing trend; it’s a substantial change in consumer behaviors that could last long into the future.

Data provided by the U.S. Federal Highway Administration and reported by Consumer Shield illustrates this point. Domestic car registrations peaked at 138 million in 2001 but fell to just under 100 million in 2022—marking a multi-decade low. Although the COVID-19 pandemic influenced this decline, the trend was already in motion long before the outbreak.

Exploring Vehicle Ownership Trends

You may come across various statistics around this topic which can be misleading. For instance, a widely cited report from the Federal Highway Administration states that as of 2022, there are 283.4 million registered vehicles in the U.S. This figure, however, encompasses not only private cars but also buses and trucks typically owned by businesses and government entities.

The reality is that the number of vehicles owned by the average American household is stagnant, with data indicating that households owned on average 1.83 automobiles as of 2022, down slightly from 1.89 in 2001.

Global Trends Reflecting Similar Patterns

This trend of declining vehicle ownership is not limited to the U.S. As Uber expands internationally, similar patterns are emerging around the globe. A recent Zipcar poll reveals that over one-third of Americans are contemplating a future without owning a vehicle, with nearly 20% seriously considering alternative transportation options.

What the Data Tells Us

Other metrics support this growing detachment from car ownership. Hedges Company estimates that the sales of light vehicles in the U.S. are expected to reach about 15.9 million units this year—a modest increase yet still significantly below the 17.4 million peak seen in 2016. Younger consumers, in particular, exhibit a declining interest in obtaining a driver’s license. As of 2022, only 25% of 16-year-olds had their licenses, a stark contrast from 50% in 1983. The percentage of drivers among 18-year-olds has dropped from 80% to just 60% in the same frame.

The Economic Factors at Play

A chief contributor to this trend is the financial burden associated with vehicle ownership; the average monthly payment for a new car now exceeds $700. Youth today find alternatives—including Uber’s ride-hailing service—much more attractive for their lifestyles, allowing them flexibility and convenience without the ongoing costs associated with car ownership.

The Case for Uber vs. Amazon

It’s essential to clarify that choosing against Amazon as an investment does not mean it lacks potential. On the contrary, Amazon’s business model aligns with the same societal shifts favoring Uber; consumers increasingly opt for e-commerce and home delivery, minimizing the need for independent transportation.

Despite their merits, Uber may hold an advantage in terms of growth potential. Many investors still underestimate the significant cultural momentum propelling Uber’s expansion and may not fully grasp how long these trends could last. According to Future Market Insight, the global ride-hailing sector is poised to grow at a robust average annual rate of 15.4% through 2034, suggesting that Uber is well-positioned to capitalize on this growth trajectory.

Assistance from AI legalese decoder

Navigating the intricate world of investment can be daunting, particularly when deciphering the legal documents and terms associated with stocks. This is where AI legalese decoder can provide essential assistance. By transforming complex legal jargon into plain language, this tool empowers investors to comprehend important details about stocks like Uber and Amazon—making informed decisions simpler and more accessible.

Taking Action

Ever feel like you’ve missed the opportunity to invest in stocks that soar? If so, you’ll want to pay attention. Our team of expert analysts occasionally issues a “Double Down” stock recommendation for companies they believe are positioned for imminent growth. If you’re worried that the best chances have already passed, now is the time to invest before additional increases occur. The statistics are compelling:

• Nvidia: If you’d invested $1,000 at the time of a Double Down in 2009, you’d now have an incredible $374,613!
• Apple: A $1,000 investment when we doubled down in 2008 would have ballooned to $46,088!
• Netflix: A $1,000 investment at the time of our 2004 recommendation would now be worth $475,143!

At this very moment, we are issuing “Double Down” alerts for three remarkable companies that you won’t want to miss.

Conclusion

The potential for strong returns in growth stocks, particularly in companies like Uber, is often underestimated. By leveraging tools like AI legalese decoder to ensure that you fully grasp each investment’s intricacies and opportunities, you’re giving yourself the best chance to succeed in this evolving market. Don’t overlook the chance to capitalize on promising opportunities—now might be the best time to consider your next investment move.

See 3 “Double Down” stocks »

Returns as of December 30, 2024. Note that past performance is not indicative of future results.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool’s board of directors. James Brumley holds no positions in the mentioned stocks. The Motley Fool has positions in and recommends Amazon and Uber Technologies.

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