Uber Technologies Inc. is about to join the S&P 500 Index starting December 18, just before regular trading begins. This move indicates a positive shift for the San Francisco technology company. The announcement by S&P Dow Jones Indices on Friday means Uber will be a part of the benchmark index.

The decision to include Uber in the S&P 500 is not just a ceremonial nod; it carries substantial financial implications. The S&P 500 is a widely monitored benchmark index, closely followed by numerous funds designed to replicate its holdings.

Strong Operating Profit

The announcement comes on the heels of Uber's reporting two consecutive quarters of operating profits. This has ignited a substantial rally in the ride-sharing giant's stock throughout the year. This achievement is particularly noteworthy given the challenges posed by the COVID-19 pandemic, which severely impacted Uber's core ride-hailing business due to widespread lockdowns and the surge in remote work.

Business Pivot

Adapting to the evolving landscape, Uber demonstrated resilience by strategically pivoting towards its nascent food-delivery division during the pandemic-induced downturn. What was initially a response to the decline in ride-hailing demand has now evolved into a substantial revenue driver for the company. This diversification strategy has not only shielded Uber from the worst effects of the pandemic but has also positioned it for sustained growth.

The pandemic-induced limitations on mobility and the work-from-home trend created a paradigm shift in consumer behavior, reducing the immediate need for ride-sharing services.

Food Delivery

While the ride-hailing segment faced adversity, Uber's adept pivot towards food delivery not only mitigated losses but emerged as a key driver of revenue. The company's nimble adaptation to evolving market dynamics showcases its agility and ability to transform challenges into opportunities. The ride-sharing giant's success story serves as a testament to the resilience and strategic acumen required to navigate turbulent times successfully.

Uber On Stock Market

Many are suggesting to buy Uber as it is a leader in the coming offline era. Internet businesses are increasingly shifting to offline strategies over online services, and Uber has capitalized on that early in the cycle. This creates a better long term strategy and plus a reason to own the stock.

Uber stock took off today after receiving positive calls from a number of analysts. Uber’s stock was down about 5% since its market debut (IPO) at the New York Stock exchange (NYSE) in May. According to the Bloomberg service, Uber just received 0 sell ratings, 21 buy ratings, and 5 holds. The average 12 month price target from those analyst was $53.70. Some at Lead Edge Capital think Uber stock is dramatically undervalued.

The company has 93 million monthly active customers of its app for both food delivery and transportation needs, the ride-hailing company over the next five years can attain 25% revenue growth, according to Raymond James.

The proposed multi-billion dollar Uber SoftBank deal appears to be progressing.

A spokesperson confirmed that Uber has decided to continue with the long-awaited investment with Soft Bank Group.

While Uber has not explained the details of the plans, the future arrangement includes a $1 billion investment, based on the latest valuation of $70 billion. A close, but unnamed source, states this deal is an extension of the recent Series G round.

Additionally, $9 billion of Uber shares is expected to be purchased from shareholders and employees alike in order to earn the group lead by SoftBank and Dragoneer Investment Group a 14% ownership stake. While a price has yet to be set, these shares are expected to be purchased at a discounted valuation.