NVDA Investment Sends SERV Stock Soaring 233%
Last Friday, shares of $Serve Robotics Inc.(SERV)$ , an AI-powered autonomous delivery robot company, soared 187%, and continued to climb 16.2% on Monday, resulting in a whopping 233% surge over two trading days.
The rocket fuel? $NVIDIA Corp(NVDA)$ revealed it had acquired a 10% stake (3,727,033 shares) in SERV. The company made its $NASDAQ(.IXIC)$ debut on April 18, 2024, at $4 per share, with 37.1 million shares out standing.
Prior to NVIDIA′ s disclosure on Thursday, the stock was trading at $2.63. By Monday's close, it had skyrocketed to $8.77. Before this, SERV traded on the OTCQB Venture Market.
What does SERV do?
Originally spun off from food delivery giant Postmates (acquired by $Uber(UBER)$ in 2020), SERV develops and operates low-emission, AI-driven delivery robots. It's currently focused on corporate partnerships for last-mile food deliveries, with plans to expand into groceries, pharmaceuticals, cannabis, and package delivery.
During the pandemic in 2020, SERV launched robots in Los Angeles, completing over 10,000 deliveries by year-end. Since its spin-off in 2021, SERV has partnered with Uber, launching small-scale deliveries in early 2022 and deploying up to 2,000 robots on Uber Eats platforms across multiple US markets by June that year.
As of July filings with the SEC, SERV had over 100 robots in operation, integrated with Uber Eats and 7-Eleven, and piloted with $Wal-Mart(WMT)$ , a major pizza chain, and coffee shops. In April, SERV inked a deal with $Magna(MGA)$, making it the exclusive contract manufacturer for SERV's robots.
SERV's Financials
In Q1 2024, SERV's revenue hit $946,711, amassive leap from $40,252 in the same period last year, thanks to $850,000 from software servicec ontracts with Magna and modest gains from delivery and branding services.
However, net losses stood at $9 million or $0.37 per share, wider than $5.1 million or $0.77 per share in Q1 2023(due to share dilution). For FY2023, SERV reported $207,545 in revenue and a net loss of $24.8 million.
Liquidity's a concern for this early-stage tech firm. In Q1, operating activities burned through $4.1 million in cash, leaving just $430,000 in cash and equivalents. The April IPO infused $35.7 million, boosting cash to $36.1 million. But with expansion plans, cash burn is expected to accelerate.
SERV: A High-Risk Play
For most investors, SERV's stock is too risky. Beyond losses, a major concern is customer concentration—90% of Q1 2024 revenue came from one client (likely Uber).
Meanwhile, NVIDIA, as an upstream AI chip and tech provider, stands to benefit regardless of who wins in the robot race, offering a safer bet.
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