Since the start of 2023, both the S&P 500 and Nasdaq Composite Index have put up tremendous gains. This favorable market backdrop has helped lift certain businesses much higher than others.

Uber (UBER 0.69%), for example, has soared 168% during that time. It's currently sitting at 20% off its peak price, but investor enthusiasm is still high toward this company.

Can this growth tech stock continue its ascent to reach a $1 trillion market cap by 2035? Investors need to consider where Uber is today, as well as where it could go, to determine if it has as shot at entering this exclusive club.

Demand remains robust

Uber just reported financial results for the first three months of 2024. And once again, growth remains the key part of the story.

In the first quarter, Uber saw its user base and gross bookings jump 15% and 20%, respectively. Gaining more customers who spend more on the platform is the name of the game. This helped drive a 15% gain in revenue, from $8.8 billion in the year-ago period to $10.1 billion in Q1.

What I find most encouraging is that these trends are occurring in an uncertain economic environment. Many retailers are struggling to boost sales growth, especially as it pertains to big-ticket purchases. But people are still showing interest in services, like rides and food delivery, even when inflation pressures are a cause for concern.

Getting to $1 trillion

The pace of innovation and disruption that can happen in the internet economy is remarkable. In 15 years, Uber has become a $138 billion company. That impressive rise can't be ignored.

If the business did get to a market cap of $1 trillion in 11 years, it would imply an annualized increase in value of 19.7%. This would almost undoubtedly outperform the S&P 500 and Nasdaq Composite Index, which would be a fantastic return for shareholders.

To be clear, I give this outcome a low probability of actually becoming a reality. As any business starts to scale up and further penetrate its markets, there is naturally less expansion opportunity. Uber is already available in 10,000 cities, so I'd expect its growth going forward to decelerate notably from the compound annual rate of 29% revenue increases between 2018 and 2023.

Moreover, Uber might have to spend more on marketing, product development, or driver and rider incentives to move the needle, at least much more than it had to in earlier days. This could affect the financials.

My prediction could prove to be way too conservative, and I could be wrong. It's possible that management will make huge progress in other verticals, like advertising or freight. Or maybe there will be a breakthrough with autonomous vehicle technology that results in lower vehicle ownership among consumers, dramatically boosting demand for Uber's ride-hailing services. I wouldn't rule this out, but it's simply too unpredictable to factor into your investment decision.

Still a smart buy

While I don't believe Uber will get to a $1 trillion market cap by 2035, that doesn't mean this is a stock you should totally discard. In fact, this business should be on your investing radar.

Uber has a strong brand, and it benefits from powerful network effects. Plus, management always seems to be focused on finding ways of better serving users. These attractive qualities should help keep it atop the ride-hailing and delivery industries for a long time.

With the stock down 20% from its February peak, investors can buy shares at a forward price-to-earnings ratio of 33. That doesn't scream "bargain," but it's a compelling entry point for long-term investors.