Shares of Serve Robotics Inc. (NASDAQ:SERV) rose Friday after Northland Capital Markets analyst Michael Latimore initiated coverage on the stock with an Outperform rating and a $16 price target.

What To Know: Latimore noted that Serve Robotics is at the forefront of physical AI, focusing on autonomous mobile robots for public spaces, with a key use case in food delivery.

The analyst explained that Serve's robots offer efficient delivery methods, reducing costs from around $10 per delivery via car to just a couple of dollars with the robots. He also reported that these robots have a 99.8% success rate, which he stated is higher than human delivery performance. Latimore further highlighted that the company's technology is based on proprietary data, algorithms and expertise in areas such as lidar and video AI.

Latimore noted that Serve Robotics has significant backing from companies like Uber Inc. (NYSE:UBER) and NVIDIA Inc. (NASDAQ:NVDA) and is expected to launch 2,000 robots by Fiscal-year 2025. He reported that Serve's revenue is projected to grow to $15.6 million in Fiscal-year 2025 and $60.8 million in Fiscal-year 2026, with the company expected to break even.

The analyst explained that the market for autonomous mobile robots, particularly in food delivery, is still emerging but offers a large total addressable market.

SERV Price Action: Serve Robotics shares were up by 9.02% at $9.33 at the time of writing, according to Benzinga Pro.

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Photo Credit: Courtesy of Serve Robotics, Inc.