/Jen-Hsun%20Huan%20NVIDIA)
The robotics industry is on the brink of explosive growth, transforming sectors from logistics and healthcare to manufacturing and agriculture. Projections indicate that the global robotics market will hit $46.1 billion by the end of 2024, with the U.S. generating $9.4 billion alone. Looking forward to 2029, this market is expected to surge to an astonishing $73 billion. Amid these booming growth prospects, one stock that has been gaining serious investor attention is Serve Robotics Inc. (SERV).
Founded in 2017 as the robotics division of Postmates, Serve Robotics has swiftly emerged as a standalone innovator in the industry. Following Postmates' acquisition by Uber (UBER) in 2020, Serve became an independent company in 2021, and made its public debut this April.
However, the real spotlight on the company sparked up in July when tech titan Nvidia (NVDA) disclosed a 10% stake worth $3.7 million in Serve, sending the stock soaring. Armed with cutting-edge artificial intelligence (AI) technology from chip giant Nvidia and the support of its former parent, Uber, Serve's delivery robots are already making waves on the Uber Eats platform.
Moreover, recently, the sidewalk delivery company unveiled its third-generation autonomous delivery robot, boasting enhanced capabilities that could redefine the delivery landscape by 2025.
While Serve Robotics may not be profitable just yet, its state-of-the-art autonomous delivery robots are packed with potential. With a smart scaling strategy in place, Serve appears well-positioned for remarkable long-term growth, especially as demand for automation continues to explode across industries.
So, is now an opportune time to load up on shares of this Nvidia-backed robotics powerhouse for long-term growth? Let’s take a closer look to find out.
About Serve Robotics Stock
Valued at a market cap of around $335.7 million, California-based Serve Robotics Inc. (SERV) is revolutionizing delivery with its advanced, AI-powered, low-emissions sidewalk robots designed to make delivery both sustainable and economical. Since spinning off from Uber, Serve has already completed tens of thousands of successful deliveries for partners like Uber Eats and 7-Eleven.
With scalable multi-year contracts, including a landmark agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across various U.S. markets, Serve is primed to lead the way in the future of autonomous delivery. Shares of this autonomous delivery company have skyrocketed a stunning 238% over the past six months, easily dwarfing the broader S&P 500 Index’s ($SPX) 14.6% return during the same time frame.
A Dig Into Serve Robotics’ Q2 Financials
After posting impressive Q2 financial results, shares of Serve took off more than 9% on Aug. 14. The company recorded a staggering 655.3% year-over-year increase in revenue, reaching approximately $468,375, driven by strong performance in its software and delivery divisions.
Although Serve still remains unprofitable, it significantly trimmed its quarterly loss to $0.27 per share, down from $0.74 a year ago. This major improvement highlights Serve's positive momentum as it scales up its operations.
During the quarter, Serve ramped up its daily supply hours to 385, achieving an impressive 106% year-over-year increase and a 28% sequential rise. The company also experienced an 85% surge in daily active robots compared to the previous year, with a 23% increase quarter-over-quarter, showcasing its remarkable operational growth.
Plus, with a robust $28.8 million in cash and cash equivalents as of June 30, Serve is well-equipped with a solid financial cushion to fuel its ambitious expansion plans.
In its Q2 earnings release, management unveiled an ambitious expansion strategy, planning to deploy at least 250 additional robots in Los Angeles by Q1 of fiscal 2025. Additionally, the company aims to roll out a total of 2,000 robots under its partnership with Uber Eats by the end of fiscal 2025, potentially unlocking an impressive annual run-rate revenue of $60 million to $80 million.
Serve Robotics Unveils Its Third-Generation Delivery Robots
On Oct. 16, shares of SERV stock closed up 3.9% after the company officially lifted the curtains on its third-generation autonomous delivery robot, a game-changing advancement that showcases the company's commitment to innovation in the delivery space. With plans to deploy 2,000 of these new units on the Uber Eats platform across various U.S. markets in 2025, Serve is setting the stage for a remarkable expansion.
This new model features significantly enhanced capabilities, including the ability to carry more goods, operate at nearly double the speed, travel twice as far on a single charge, and spend an additional six hours in the field each day, all while achieving reduced delivery costs.
Powered by Nvidia’s Jetson Orin module, which offers five times more on-board computing power, along with Ouster’s cutting-edge REV7 digital lidar and significant upgrades to the sensor suite, these robots utilize Serve's latest and most robust AI model architecture for quicker and more precise autonomous navigation.
Even more impressive is that safety remains a top priority with these third-generation robots, which feature advanced capabilities such as fail-safe mechanical braking, autonomous collision avoidance, and enhanced emergency stopping, allowing them to stop 40% faster than previous models.
CEO Dr. Ali Kashani highlighted the engineering prowess behind these enhancements, stating that this new robot represents years of relentless effort and innovation. He emphasized that Serve is positioned to lead the cost curve while expanding its autonomous fleet across the country in the coming months. Moreover, mass manufacturing is already in full swing, thanks to a collaboration with Magna International (MGA).
Chief Hardware & Manufacturing Officer Euan Abraham expressed enthusiasm about introducing these cutting-edge robots to new cities and neighborhoods in 2025, promising an unparalleled delivery experience for users. As Serve Robotics gears up for this major rollout next year, the combination of advanced technology, strategic partnerships, and a strong growth trajectory makes it an enticing investment opportunity.
What Do Analysts Expect For Serve Robotics Stock?
Though coverage is light, Wall Street is highly bullish on SERV stock, with a unanimous “Strong Buy” rating from the three analysts in coverage.
Even after its stellar price performance so far, the average analyst price target for SERV stands at $14.67, signaling a notable potential upside of nearly 54% from current levels. The Street-high target of $16 hints at a possible rally of up to 67.4%, showcasing the exciting growth prospects that lie ahead for this stock.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
