Uber’s New Acquisition and GE Aerospace’s Search for Parts

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss:

• Uber’s acquisition of Delivery Hero.
• How “sticky” are ridesharing apps.
• GE Aerospace’s earnings.
• Can AI infrastructure cause supply chain headaches for others?
• Mailbag: How to view emerging industries & technologies.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on July 16, 2026.

Tyler Crowe: Who ordered the Uber acquisition today on Motley Fool Hidden Gems Investing? Welcome to Motley Fool Hidden Gems Investing. I’m your host for today, Tyler Crowe, and today I’m joined by longtime contributors Jon Quast and Matt Frankel. Earning season is starting to heat up. Not as many companies are rolling in. We’re going to start to see that later in the month and early August, but we do have some early trickles in. Notably today, we had GE Aerospace. We’ll also get to our mailbag, where we have some listener questions.

But we want to start today with the big announcement from Uber Technologies, who announced that they are going to acquire Germany delivery company, Delivery Hero in a $14.8 billion deal. Now, this has been telegraphed a little bit. Uber already had an outstanding stake in the company, and they agreed to acquire from, I believe it’s, I hope I don’t pronounce this wrong, but Prosus, they had a stake in the company, and they’ve agreed to sell it to Uber. Uber is going to have a 53% stake with this and then do a voluntary, “Hey, who wants to sell their shares to us, we’ll buy them at a set price.” That’s how the deal is structured. There’s also a little bit of sell some of Deliver Hero’s assets in certain countries to avoid any jurisdiction, regulatory, anti trust issues. But I think the big thing to me, and, Matt, I want to really read in on this here. When I think of Uber, we always think of, like, hailing more specifically than delivery, and so this $14.8 billion deal seems to be like, Hey, we really want to be much more in delivery than we do just the ride share part.

Matt Frankel: Most investors don’t realize it. But Uber’s mobility, which is the name for the Rideshare business, and their delivery bookings are almost dead even, almost 50-51 in terms of booking volume. Now, the average person spends more on a delivery order than on a mobility order. You might get an Uber ride somewhere for $10, but the average meal you have delivered $50 or $60. Both grew about 25% year over year in the most recent quarter, but Rideshare is still Uber’s biggest revenue source by a significant margin. They take roughly a 50% larger cut from bookings on ride-share versus delivery. This deal will make the delivery business significantly larger by bookings compared with Rideshare.

The bigger question here, as you mentioned, is why? Delivery Hero has an established presence in several markets already, so this allows Uber to expand its physical reach without building market by market, which is expensive and a risk. It roughly doubles the number of markets where Uber will offer both delivery and Rideshare in its app, which is a big competitive advantage. Speaking of competitive advantages, this is really a response to DoorDash, which has been aggressively expanding internationally and is really trying to outcompete Uber.

Tyler Crowe: Jon, not to like completely discount it, too, but in addition to rideshare delivery, which is creating this ecosystem, they do have a rather burgeoning advertisement business, as well, that, can layer onto this rather well, right?

Jon Quast: I think that there’s absolutely an angle here that we need to consider with advertising, not to discount anything that Matt just said, I mean, there is a competitive angle here to this acquisition of delivery hero. Certainly DoorDash figures into the equation somewhere. But as you think about what Uber is, people don’t realize how big and important the advertising business is. Really, it was the launch of advertising that propelled Uber to become a profitable business a few years ago and really just changed those economics considerably.

Now, if you think about what does it take to build a digital ad business, you really want platform adoption and interaction with that platform so that you can display the digital ad to the user, to the eyeballs, if you will. If it can get people adopting the platform more, the Uber platform, if it can get people interacting with the platform more, that’s a greater chance for digital advertising. You want to grow both the mobility, the ride sharing, but also the delivery, the meal delivery because that’s another, if you will, just another touch point with that end user. I think that as you’re considering, hey, how do we build this food delivery or grocery delivery even more than what we have today? I think that there is an aspect that the management team is thinking, how do we get people interacting more with the platform because we want to show them an ad because that’s really good for our business?

Tyler Crowe: It’s funny, they say bad news comes in three, but I just want to say, news in general comes in three because, Matt, you, myself, and our Tuesday potting buddy, Lou Whiteman, we actually had a member live Q&A earlier this week, and Uber came up, specifically related to a lawsuit or a legal fight that they’re picking with Alphabet‘s Waymo and it’s related to autonomous taxis in Washington, D.C. area. We don’t have to get into the details, but it’s basically like Uber is saying, Hey, you need some humans every once in a while, and Waymo saying, No, you don’t. But look, the broader point was, I think the legal fight exposed that, these ride-hailing or ride-sharing apps, whatever we want to call them, may not necessarily have that sticky network effect as much as people have initially believed. But does that same problem show itself in the food delivery segment, Ubers, delivery, DoorDash? Does that segment of the baby, is it as sensitive to this network, that, Well, I can pick whatever app I want, and it’s not quite as sticky as, maybe food delivery is?

Matt Frankel: Well, it’s not an easy answer. One conclusion that we drew in the discussion that you’re talking about is that Waymo doesn’t really need Uber’s app to dominate a market. It certainly helps, especially at first, but it isn’t totally necessary on a long-term basis. Riders are simply going to gravitate toward the largest and most liquid booking marketplace in their area. With delivery, there’s even less stickiness in a lot of ways. Most people have two or three delivery apps on their phone. Many restaurants are on multiple platforms, so it’s not exclusive. Usually, at least DoorDash and Uber Eats, and customers can price compare between the two apps. Some run fee specials on one app, but not the other. It’s really not a sticky platform, but on the other hand, the Uber 1 membership platform that covers rides and delivery, that can be a competitive advantage when it comes to customer loyalty. DoorDash doesn’t have the rideshare aspect of that. But the acquisition shows that scale and market density are really the true cues to winning in this business, not a sticky customer base.

Jon Quast: I just want to add on here a little bit. When we talk about network effects, I think that Uber does have a network effect, and it is a big deal. You think about what does it have? It has a two-sided marketplace. You have the consumer on one end, the person who needs a ride, but then you also have the driver on the other end. These are people voluntarily coming to the Uber platform saying, I’m going to offer my services here because there are potential customers on the other side of that marketplace and vice versa. That is really powerful, and I think that when you are a brand such as Uber, that is ubiquitous in many regards, that makes a big deal.

But what Waymo does is it’s actually disrupting the game in an important way. It’s not a two-sided marketplace. It’s a one-sided marketplace. Can you gain that ubiquity with the one-sided business model cause you don’t need the driver? That’s my point. You’re having the driverless cars. Really, it’s just the proliferation of the vehicles themselves in those markets. It’s disrupting the game, not that Uber doesn’t have a powerful network effect. If we’re playing the two-sided marketplace game, that’s really important. But if autonomous vehicles are able to change the rules of the game by offering the one sided marketplace, I think that’s where, this does get a little bit disruptive.

Tyler Crowe: All right, so we’ve got burgeoning advertising business that’s layered on. It’s creating profitability. It’s growing market share and overall revenue and deliveries for all of it’s part of the apps. But, we’re talking about the risks here. I want to put you a little bit both on the spot with our last question here. Shares of Uber are more or less flat for a little over two years now, and I think they traded it I think when I checked this morning it’s like 18 times earnings. Is this deal for Deliver Hero enough of a move-the-needle deal for this company? Or do you see this as like, it’s just still treading water? I can’t say I’m too interested in the stock right now.

Matt Frankel: For me, the answer is not really, and for two reasons. For one, this feels like more of a defensive move to me than an offensive growth strategy. No. 2, the multiple compression we’ve seen in Uber lately. You mentioned the stock’s been flat for two years, even though the business has grown. It’s primarily from worries about the ride-share side of the business, specifically Waymo, as a real threat to that part of the business. For those reasons, I don’t think this is going to be a needle mover, but it’s going to, be a preventative move.

Jon Quast: This is just a hot take for me, but I’m pretty lukewarm on this deal for Uber, mostly because it already has this really large international presence as a brand. I think it has incredible brand recognition globally. Then to acquire these assets from delivery hero and Uber CEO saying that he really appreciates some of these assets, I don’t see that these assets are superior to its own. I think that Uber has superior assets. To spend this much money to acquire what I would consider inferior assets in international markets, that doesn’t make a lot of sense to me, so I’m lukewarm on this deal right now, still processing it, but that’s how I feel.

Tyler Crowe: All right, fair enough. Coming up after the break, we’re going to talk about GEO spaces earnings.

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Tyler Crowe: Last week on the podcast, we talked about GE Vernova quite a bit, talking about the advantages, disadvantages, how it’s been the strange darling of the GE breakup. It only seems fair that we discussed GE Aerospace because it did report earnings earlier today. The company’s results beat expectations. Management raised guidance. But as we’re taping this show right now, shares are down about 3.2%. Guys, can you help me connect the dots here. At least, as far as I saw, it seemed pretty good.

Matt Frankel: For one thing, and I know Jon has some thoughts about this, the market clearly had high expectations going into this. I was trading for about 50 times forward in earnings before this report. Even though management raised guidance, they still flagged a few things that represent uncertainty, like elevated jet fuel prices, the macro environment, things like that. Demand is clearly outpacing supply here, which is good for pricing power, at least in the short term, but it also means that GE can’t fully capture its opportunity right now, and I think that’s a little bit of what investors are reacting to, as well.

Jon Quast: I would definitely double down on the valuation component here. You think about stocks that outperform the market. Usually growth is a very big component of that outperformance, and you look at how big and mature GE Aerospace is at this stage of the game. It’s hard for me to imagine it’s sustaining above average growth over the long term from here, and to Matt’s point, trading right now at I believe it’s 43 times its earnings, that’s quite elevated relative to the average valuation of the stock market right now. I think that even if the stock, I think there’s a case where the stock could drop further to come down to a reasonable valuation, but even if it doesn’t, I think that it’s going to have to sustain some really powerful, impressive growth over the next several years just to justify where it’s at right now. I think that even though it did deliver that double beat, I think that investors are saying, maybe this is a little bit too hot to handle right now, and we’ll just trim our position.

Tyler Crowe: The thing that stood out to me, and this is taking it in a slightly different direction, thinking a little bit more of, like, supply chains and what’s going on in the manufacturing world of America right now is that commentary from management about that availability of material for spare parts. It wasn’t just like, we’re running a little short on something. It was specifically like material because there happens to be another major turbine maker, GE Vernova, who also is building way more turbines than they can basically fulfill right now. They’ve got a five-year backlog on what they need to do. I don’t want to sound like a broken record, I would call it, like, the super niche, only maybe five people might get this joke, but whenever I say AI infrastructure, I’m most be like, Pee-Wee Herman was like, Ah, you said the secret word because we seem to do it every single day now.

But, that AI infrastructure build-out and AI’s, infrastructure’s ability to hoover up every spare dollar of capital or spare part out there. The capital expenditures that are going into this are crowding out a lot of other spaces. As we think about GE Aerospace and supply chains and disruption and like AI being the whale of the manufacturing industry and gobbling up everything it can, is there a real risk for these non-AI companies like GE Aerospace, that could run into supply chain crunches and cost inflation from AI taking up all its spare capacity?

Jon Quast: I want to just try to illustrate a little bit the tension that you’re bringing out here, Tyler, and this is a complicated supply chain story with GE Aerospace. If you recall coming out of the pandemic, the pandemic certainly disrupted supply chain immensely, and a huge part of this business is the spare parts business, the repair business, right, that maintenance revenue, and if you look at what it just did in the most recent quarter, GE Aerospace, record internal shop visits. It is fixing stuff at some record volume here and so that’s a really big deal. It is coming out of those supply chain constraints from the pandemic, breaking records in some places. But then at the same time, it said that material availability restraints grew 20% from the previous quarter. On one hand, I would say that GE Aerospace is getting it done operationally. It is definitely doing a lot of work and fixing supply chains where it can, and at the same time, as you highlighted, the AI market is just sucking up all this demand out there from so many places. It is still struggling to keep up with supply chain needs, and so it’s a complicated story.

Matt Frankel: Spare parts demand is exceeding available supply. They have a $210 billion backlog. They can’t get materials fast enough. The parts that go into turbines and data centers aren’t identical. But they do use the same universe of specialty metals manufacturers. It’s totally possible we’ll see costs and lead times here get worse before they get better.

Tyler Crowe: It’ll be an interesting thing to see, again, because it is hard to underestimate that ability of AI infrastructure to just suck up all the available resources, considering, you can go like four or five levels down the supply chain right now, and they’re like, we’re strained, and our backlogs are growing like crazy. It’ll be curious to see if anyone that’s not AI-related can end up getting the parts they need because it could be a challenge down the road. Coming up after the break, we’ll jump into the mailbag.

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Tyler Crowe: Hey, everyone, just a quick reminder. If you want to get a question into us, you can email us at podcast at fool.com. That’s podcast with an s at fool.com. It’s also in the show description. If you need a link. At three requests when you do it or number one, keep it Foolish. Two, keep it short enough, we can read on air and three, we can’t give any personalized advice, so try to keep it as general as possible.

Today’s question comes from Suleiman in Saudi Arabia. The question is, hello, fools. I found your podcast my first week of the job in 2024, and I haven’t missed a single episode since. Hey, thanks for that Suleiman. That’s awesome. I learned so much how to analyze companies and ask right questions. Question that he had was with many new emerging industries, there are some companies that are leading a small market with huge potential for expansion, and the one that he was specifically talking about here is Deep Sea mining. However, the industry is still facing legislative obstacles and operational uncertainties. Is this considered a foolish investment or an unnecessary risk? There’s one company that he asked about specifically, and that’s The Metals Company, which is Ticker TMC. Guys, I’m going to let you take a swing at it, and then I’ll see if I can wrap it up at the end.

Jon Quast: This is a great question, and I think that emerging trends are pretty difficult when it comes to investing, and that is because they are so grounded in the future, none of us are very good at predicting the future with certainty. We all are limited in time and space. It’s challenging. There are three questions that I would ask as I approach an emerging trend. Here’s the first question. Will it emerge? Second, when will it emerge? Third, how will it emerge? Will it, when will it, and how will it? Those are really three important things to answer if you’re going to start investing in a trend.

To the first one, will it emerge? I can rewind the clock to 3D printers when this was just coming out onto the market. I don’t even remember how long ago anymore, but it was probably over 10 years ago. I really was a believer that these were going to be in every single home in the United States in the world. It was going to be completely like a TV in your home. You’re going to have a 3D printer. Alas, it did not play out that way.

Three-D printing is bigger today than it was 10 years ago, but it didn’t play out the way that a lot of us were thinking about at the time, or a lot of people were talking about. Did it emerge? Not really. Second, when will it emerge? Now, quantum computing is another example that we can use here. It’s a huge in the public awareness right now, quantum computing is big because there’s publicly traded companies and stocks are doing well. But those of us who have followed the quantum computing space much longer, I think, 20 years or so. This has taken a long time to play out. Directionally, I think it’s still right, but the speed at which it is being adopted and coming to fruition is way behind what some people would have projected years ago, and maybe there’s still a long time yet. When will it emerge? Hard to say. But finally, how will the trend play out?

Because you can theoretically be right about a trend, and you can be right about a timeline, but it might take a different route or go down some different train tracks than you anticipated, and therefore, the opportunity is in a place that you didn’t really expect when you started investing. I would use e-commerce as an example here. Did e-commerce play out and very quickly? Yes, it did.

But think about how many of the physical retailers were able to lean into omnichannel. Now, e-commerce played out maybe differently than we thought, so maybe we thought that Walmart would be completely disrupted. But in reality, Walmart’s become one of the largest e-commerce players in the world because it leveraged its existing store base as a distribution center network through omnichannel. It played out quite differently, and I think that you would have invested a little bit differently depending on if you could foresee how it was playing out.

Matt Frankel: I want to expand on what Jon just said about how you can be directionally right about a trend, but the investment opportunities might be a different story. Think of the dot-com era, which is right around when I started investing. Being right about the trend and which companies will be the biggest winners from a trend are two completely different things. The Internet changed the world. No doubt. It’s been the biggest technological change in our lifetimes. Period. Some of the highest flying stocks of the dot-com boom, pets.com is a good example. If you just said, who, that’s my point. It went to zero, and investors lost a ton of money, but Amazon survived and thrived. It had a true cost advantage. It was building a scale advantage.

Business fundamentals that apply no matter what the trend is. I’m not well-versed in deep-sea mining, at least not enough to intelligently comment on the opportunities there. But quantum computing has a lot of parallels. Should you invest in the pure-play quantum stocks with impressive technologies or the established businesses with deep pockets and just happen to have quantum divisions like Cisco and IBM? The market misjudging timing and, market size with emerging industries is a common pattern. Jon mentioned 3D printing. That’s exactly what happened there. Keep that in mind when it comes to position sizing and the real possibility that some of the most hype stocks in any trend could go to zero.

Jon Quast: With this question regarding Deep Sea mining in The Metals Company, let’s say that you have satisfied yourself with the answers of will it, when will it, and how will it? The other thing to consider here is the economics. Assuming that Deep Sea mining plays out as a trend in the timeline that you think the metals company is a leader in the space, are the economics of that business at scale ones that are attractive for an investment? Because oftentimes, mining isn’t a very compelling investment venture from an economic perspective. The economics are complicated and not always the most attractive. That would be the further question that I would ask once you’ve answered the other three.

Tyler Crowe: Jon stole my thunder a little bit here because I might be the only deranged person who follows materials in mining of the three of us a little bit. With a lot of these, like, speculative mining companies that are like, pre-revenue, and they put all these things like, Man, if we could mine all of this, it’s trillions and trillions of dollars worth of revenue. No. 1, they always tend to over inflate how much is actually, like, available for them to recover. No. 2, they always underestimate the costs. They always tend to overestimate the profits with, the cost of metals at the time that they’re acquiring it. On paper in the investor decks, it looks spectacular. But then when, the rubber hits the road and all the capital that means to go into these things, they tend to not turn out great.

Now, I’m not saying that The Metals Company is exactly going to go this way, but I feel like I’ve read 40 or 50 investor decks that looked a lot like this. One of the things I always say is there are multibillion-dollar mega mining giants out there, and they’re not touching this. There’s probably a reason. If they were to see some big mining backing from this, that could be the case. But otherwise, this is really, like, you might as well be buying Lottery tickets.

That’s my thought on mining. You can tell I’m not exactly a huge fan of it, even though I have studied it in the past. Guys, that’s all the time we have for today. Matt, Jon, I want to thank you for sharing your thoughts. I’m going to hit disclosure, and we’ll get out of here.

Always, people on the program may have interest in the stocks to talk about, and The Motley Fool may have formal recommendations for or against. Don’t buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements or sponsored content provided for informational purposes only. See our full advertising is closer, please check out our showrooms. Thanks for producer Bart Shannon and the rest of The Motley Fool team for Jon, Matt, and myself. Thanks for listening, and we’ll chat again soon.