Uber Stock Falls After Earnings. It’s Brushing Off the Robo-Taxi Threat.

Uber is expanding its partnerships with robo-taxi companies. (Mario Tama/Getty Images)

Uber Technologies stock was falling Wednesday, despite the ride-hailing company’s better-than-expected earnings and a $20 billion stock buyback. Those are being overshadowed by the investment needed to counter competition from robo-taxi services.

Uber reported earnings of 63 cents a share on revenue of $12.65 billion for the second quarter. Profit was in line with expectations but revenue beat analysts’ forecasts of $12.47 billion, according to a FactSet poll.

Uber forecast gross bookings of $48.25 billion to $49.75 billion for the third quarter, ahead of Wall Street’s projected $47.5 billion.

Investors were likely looking for a beat after a 48% gain in the stock this year so far through to Tuesday’s close, with the market still gauging whether the growth of robo-taxis from the likes of Tesla is a threat or an opportunity for the dominant ride-hailing player.

Uber shares fell 2.9% in early trading.

“Our platform strategy is working, with record audience, frequency, and profitability across Mobility and Delivery,” said Uber CEO Dara Khosrowshahi in a statement. “But we’re still only beginning to unlock the platform’s full potential, now with 20 autonomous partners around the world.”

Uber said last month it would invest $300 million in electric-vehicle maker Lucid in a partnership aiming to launch next year and deploy 20,000 or more autonomous vehicles over a six-year period.

Uber stock dipped on the Lucid deal, which could eventually shift its model from being a platform to owning vehicles directly. The company’s plans to continue investing heavily in such partnerships could be part of the reason for Wednesday’s fall.

“With our cash flow and our capital allocation, we can afford to invest aggressively in the autonomous space. And at the same time to return plenty of capital to our shareholders,” Khosrowshahi told analysts on an earnings call.

So far there’s little sign of nascent robo-taxi services eating into Uber’s market. Its quarterly trips increased 18%, to 3.3 billion, with a 15% increase in monthly active platform consumers. Gross bookings rose 17% to $46.8 billion.

“Overall consumer strength remains strong as [Uber] is passing insurance cost savings to the consumer and is seeing some trip growth acceleration as a result,” wrote William Blair analyst Ralph Schackart in a research note. “Going forward, trips is expected to accelerate in the U.S. next quarter, which shows its ability to grow at scale.”

Schackart kept an Outperform rating on Uber stock with no price target.

Write to Adam Clark at adam.clark@barrons.com