Serve Robotics (NASDAQ: SERV) experienced a substantial surge in its stock price following the disclosure that Nvidia owns a 10% stake in the company. This revelation resulted in a 187% increase in Serve Robotics’ stock on Friday, followed by an additional 16.2% gain on Monday, culminating in a two-day surge of 233%. Nvidia disclosed its ownership of 3,727,033 shares of Serve’s 37.1 million outstanding shares, contributing to the market’s excitement.
Serve Robotics, an autonomous sidewalk delivery company, made its public debut on the Nasdaq on April 18, 2024, at $4 per share. Since then, the stock has demonstrated significant growth, closing at $8.77 on Monday, representing an increase from $2.63 prior to the news of Nvidia’s stake. Serve Robotics was initially part of Postmates before being spun off by Uber Technologies in 2021 following Uber’s acquisition of Postmates.
Serve Robotics specializes in the development and operation of AI-powered sidewalk delivery robots designed to serve people in public spaces. The company primarily focuses on last-mile food delivery in cities for enterprise partners but has plans to expand its services to include grocery, pharmacy, cannabis, and parcel delivery. Serve Robotics’ current fleet comprises over 100 robots, integrated with platforms like Uber Eats, 7-Eleven, Walmart, and other major partners.
Financially, Serve Robotics reported revenue of $946,711 in the first quarter of 2024, a substantial increase from the previous year. However, the company also reported a net loss of $9 million for the same period. Serve Robotics generated $35.7 million in cash from its IPO, bringing its total cash and cash equivalents to approximately $36.1 million. The company’s high cash-burn rate is a point of concern, as it plans to utilize the IPO proceeds to scale up its operations.
Serve Robotics is considered a risky investment due to its early-stage status and lack of profitability. The company’s high customer concentration, with one customer accounting for 90% of its revenue in the first quarter of 2024, adds to the risk profile. However, Serve Robotics’ partnership with Nvidia, a leading player in AI technology, suggests potential growth opportunities within the robotics sector.
Investors looking to capitalize on the growth potential of robotics may consider investing in Nvidia stock. Nvidia’s GPUs and technology are widely employed in the training and deployment of autonomous machines, including robots. Serve Robotics has been collaborating with Nvidia for over five years, indicating a strong partnership between the two companies.
Ultimately, the decision to invest in Serve Robotics or Nvidia depends on individual risk tolerance and investment goals. While Serve Robotics presents high growth potential, it carries significant risks associated with early-stage tech companies. Conversely, Nvidia offers exposure to the broader robotics sector through its established presence in AI technology.
In conclusion, the surge in Serve Robotics’ stock price following Nvidia’s ownership stake underscores the growing interest in the robotics sector. Both companies present unique opportunities for investors seeking exposure to this innovative industry. It is crucial to conduct thorough research and consider the risks before making investment decisions in these companies.
Source: https://finance.yahoo.com/news/nvidias-ownership-stake-news-sent-114948915.html