Nvidia, a prominent player in the artificial intelligence (AI) chip industry, holds a significant 10% stake in Serve Robotics, an autonomous sidewalk delivery robot company that recently went public. Serve Robotics saw its stock price surge by an impressive 187% after Nvidia’s ownership stake was disclosed in an SEC filing. With Nvidia owning over 3.7 million shares of Serve, the market reacted positively to this news, driving the stock price even higher in the following days.
The initial public offering (IPO) of Serve Robotics took place on April 18, 2024, on the Nasdaq exchange at $4 per share. Since then, the stock has experienced a remarkable increase, closing at $8.77 on Monday, showcasing a tremendous growth trajectory. Prior to its Nasdaq listing, Serve traded on the OTCQB market, commonly known as the “Venture Market.”
Serve Robotics, based in Silicon Valley, was originally part of Postmates, a food-delivery company. In 2021, following Uber Technologies’ acquisition of Postmates, Serve was spun off as a separate entity. The company specializes in developing AI-powered delivery robots that operate on sidewalks, focusing primarily on last-mile food delivery in urban areas. Serve’s long-term vision includes expanding into other sectors such as grocery, pharmacy, cannabis, and parcel delivery.
Since its inception, Serve Robotics has made significant strides in the delivery robot space. It launched its robots in Los Angeles in 2020 during the COVID-19 pandemic and completed over 10,000 deliveries by the end of the year. Following the spin-off from Uber, Serve formed a strategic partnership with the ride-hailing giant and has been deploying its robots on the Uber Eats platform across multiple U.S. markets.
Serve Robotics has also collaborated with major companies such as Walmart, 7-Eleven, and Magna International, a leading automotive supplier. Magna became the exclusive contract manufacturer of Serve’s delivery robots, showcasing the company’s commitment to expanding its operations and enhancing its technological capabilities.
In terms of financial performance, 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 in the same period, highlighting the challenges faced by early-stage tech companies in achieving profitability. Serve’s cash position received a boost from its IPO, providing the company with essential capital to scale its operations and drive growth.
Despite its promising prospects, Serve Robotics remains a high-risk investment due to its early-stage status and the inherent challenges of the industry. Investors considering buying the stock should be prepared for potential volatility and uncertainty in the market. Serve’s heavy reliance on a single customer, likely Uber, also poses a significant risk to its revenue stream.
For investors seeking exposure to the robotics industry, Nvidia stock presents a more stable and diversified option. Nvidia’s GPUs and technology are instrumental in powering autonomous machines, including robots, making it a key player in the AI and robotics space. Serve Robotics itself acknowledged Nvidia’s role in its operations, highlighting the long-standing collaboration between the two companies.
In conclusion, while Serve Robotics offers exciting opportunities in the autonomous delivery robot market, investors should carefully assess the risks and consider alternative investments such as Nvidia stock for a more balanced exposure to the burgeoning robotics industry.
Footnotes:
- SERV – Serve Robotics
- AI Stocks – The Motley Fool
