Should You Forget Amazon? Why You Might Want to Buy This Unstoppable Growth Stock Instead

There are no two ways about it. Amazon is one of the modern era's best-performing stocks, up roughly 300,000% since its 1997 public offering. The next 30 years aren't likely to be nearly as rewarding, but thanks to the company's foray into cloud computing, the e-commerce giant is still one of the market's most promising investment prospects at this time.

There's a better growth stock to consider adding to your portfolio here, however. That's Uber Technologies (NYSE: UBER). Here's why.

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Whether Uber is the cause or the result, the trends are promising

Although founders Travis Kalanick and Garrett Camp didn't exactly invent the premise of ride-hailing apps, they are fairly credited with bringing the idea into the mainstream. It's still catching on with consumers, too. Uber's third-quarter revenue growth of 20% extends well-established trends. And it's increasingly profitable.

UBER Revenue (Quarterly) data by YCharts

Analysts expect more top- and bottom-line growth well into the future, too.

Data source: StockAnalysis.com. Chart by author.

This forward progress is only part of the bullish argument for owning a stake in Uber, however, and not even the most important part. Far more important is the underlying cultural reason for this continued sales and earnings growth. That is, car ownership is on the decline. Ditto for even getting a driver's license.

Numbers from the U.S. Federal Highway Administration reported by legal information website Consumer Shield flesh out the story, indicating that domestic car registrations have dwindled from 2001's peak of 138 million to a multi-decade low of just under 100 million in 2022. The COVID-19 pandemic and its fallout are responsible for at least some of the more recent weakness on this front. But this count has been regularly declining since well before the contagion took hold.

You may see or hear differing data. Particularly, a commonly cited figure from the Federal Highway Administration suggests that as of 2022 there were actually 283.4 million registered vehicles on U.S. roads. This count includes buses and heavy-duty trucks, however, which are generally owned by governments and corporations for commercial or public-service purposes.

The number of vehicles sitting in peoples' driveways is also relatively stagnant...at least as a percentage of U.S. households. Consumer Shield adds that as of 2022, the typical American household owns 1.83 automobiles, extending a slight downtrend from 2001's peak of 1.89.

A similar dynamic is evident outside of the U.S. as well, where Uber is expanding.

Young adults are normalizing a lack of car ownership as they age

It seems unlikely this shallow downtrend is set to reverse anytime soon. A recent poll performed by car-sharing network Zipcar indicates that more than one out of every three Americans is considering not owning any vehicle by 2030. Nearly one out of every five of these respondents, in fact, says they they're very serious about getting rid of their cars and using alternative forms of transportation instead.

And other data underscores this growing disinterest. For instance, Hedges Company predicts the total sales of light vehicles (sedans, SUVs, not commercial trucks) within the United States is on pace to reach a modest 15.9 million units this year despite the decent economy and greater post-COVID stability. That's up from 2023's count of 15.5 million, but still markedly below 2016's peak of 17.4 million.

Younger consumers are growing up with less interest in vehicle ownership than their parents, too...or even getting a driver's license. Numbers from the U.S. Department of Transportation indicate that as of 2022 only about one-fourth of the nation's 16-year-olds held a license, versus half of this age group in 1983. Even the number of 18-year-old drivers has tumbled from 80% back then to only 60% now.

The chief reasons for this once-unlikely dynamic? Cost is one; the average payment for a new car now stands at over $700 per month. A lack of need is another. Younger generations are completely comfortable with finding entertainment and maintaining a social life via a computer. A ride-hailing service like Uber's makes it possible to live and function in an environment where such a perspective is increasingly the norm.

And again, this dynamic is evident in other parts of the world.

Both stocks are good, but Uber stock is better

None of this to suggest owning Amazon stock at this point in time is a mistake. It's still a great play. In fact, in many ways Amazon benefits from the same underlying dynamic that's driving Uber's growth. That's the growing number of consumers that are content without owning or even driving a vehicle. These people are similarly content to shop online and let Amazon figure out how to get products to their doorstep. (Meanwhile, Amazon's cloud computing workhorse is riding a different growth trend.)

Of the two tickers in question, though, Uber is arguably the more promising prospect simply because so many investors still underestimate just how strong its cultural tailwind is and how long it could persist. For perspective, market research outfit Future Market Insight believes the global ride-hailing market is set to grow at an average annualized pace of 15.4% through 2034.

Market leader Uber is poised to capture at least its fair share of this growth.

Should you invest $1,000 in Uber Technologies right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Uber Technologies. The Motley Fool has a disclosure policy.