Riding the NVIDIA Wave, is Serve Robotics worth holding for the long term?
$Serve Robotics (SERV.US)$, the autonomous delivery robot company that saw a staggering 187% surge last Friday, continued its upward trajectory this Thursday with an over 41% increase. The company announced on July 24th the completion of a $15 million private placement to an institutional investor.
Since $NVIDIA (NVDA.US)$ reported last weekend that it holds a 10% stake in this robotics firm, Serve Robotics has been under the spotlight. The price has skyrocketed from $2.63 to $12.13 within a week, marking a new high since its reverse merger listing in mid-April this year.
On Thursday, July 18th, a filing with the U.S. Securities and Exchange Commission by NVIDIA revealed that on April 22nd of this year, NVIDIA, as a shareholder of Serve Robotics, converted the issuer's convertible bonds into 1.05 million shares of the issuer at a price of $2.42 per share. NVIDIA now holds over 3.72 million shares of Serve Robotics, accounting for a 10% equity stake.
About Serve Robotics
Serve Robotics was originally established in 2017 as part of the robotics division of Postmates, a U.S. same-city delivery and food delivery company. After Uber acquired Postmates in 2020, this division was spun off into an independent company, Serve Robotics, which completed a reverse merger with the shell company Patricia Acquisition Corp in August 2023, raising $30 million.
Serve Robotics went public on the NASDAQ on April 18, 2024, with an issue price of $4 per share. Before listing on NASDAQ, Serve's stock was traded on the OTCQB, also known as the "venture capital market."
As a leading "delivery robot" in the market, it has completed tens of thousands of deliveries for corporate partners such as Uber Eats and 7-Eleven. Uber holds nearly 14% of the company's shares and is also its largest customer.
NVIDIA's Bet, Profitable?
As of Thursday's closing, Serve Robotics has a market value of $450 million. According to its first quarter 2024 financial report, the company's revenue was $946,711, higher than the $40,252 of the same period last year. The company stated that this significant increase mainly came from approximately $850,000 in revenue generated from the software service contract signed with Magna, in addition to a 124% sequential increase in delivery and branding promotion revenue.
The company's net loss for the first quarter of 2024 was $9 million, with earnings per share of $0.37, compared with a net loss of $5.1 million, or $0.77 per share, in the same period last year.
For the company's future development, it plans to expand from the current 100 robots deployed in Los Angeles to 2,000 robots by 2025, with coverage also including Los Angeles, San Diego, and Vancouver, Canada.
With the rise of artificial intelligence, the service robot industry is also developing rapidly. Unlike Serve Robotics, which mainly focuses on delivery services, $Richtech Robotics (RR.US)$'s robots are used in healthcare, the hotel industry, and other sectors. RichTech operates in more than 30 states, but its stock performance is slightly inferior to Serve Robotics, with a 23% drop this week as of July 26th before the market opens.
However, some investors have said that RichTech Robotics not only performs well in terms of service quality and customer satisfaction but also has stronger financial conditions and growth potential.
For investors looking for a solid investment in the service robot field, RichTech Robotics may be an obvious choice. But there are also investors who believe that following NVIDIA's perspective may be a wiser choice.
In fact, this is not the first time NVIDIA has disclosed its investment in startups in the AI and robotics fields. In February of this year, NVIDIA reported investments in voice AI company $SoundHound AI (SOUN.US)$ and medical imaging developer $Nano X Imaging (NNOX.US)$, causing significant stock price fluctuations in small companies.
SoundHound AI's stock price rose by 79% within a week, and on the day of the disclosure, Nano-X Imaging's stock price also rose by 59% at one point, but both stocks have seen significant pullbacks afterward.
Feel free to share your views in the comments~
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MYJaeger : love jensen huang
vijayasri :
Dukemaster-039 : I’ll hold for a 50% short term run- it better haha
Spread Love N Joy : Don’t waste your time reading useless article.
“Riding the NVIDIA Wave, is Serve Robotics worth holding for the long term?”
THE ARTICLE DOES NOT ANSWER THIS QUESTION AT ALL.
Spread Love N Joy : That was quick and EZ Money!