Serve Robotics (SERV) posted disappointing Q4 earnings, further adding to negative investor sentiment initially catalyzed by Nvidia (NVDA) disclosing it sold its holdings in February, sending the stock down roughly 60% in the past month. Despite the downturn, the company reported strong growth for 2024, with annual revenues increasing by 773% to $1.8 million. The AI-powered delivery robot company has expanded its operations significantly, doubling its delivery capacity and reaching over 1,000 restaurants and 300,000 households. Additionally, the company has completed the design of an improved third-generation robot with enhanced capabilities at reduced manufacturing costs.
Making Robotic Progress
Serve creates eco-friendly sidewalk delivery robots, employing artificial intelligence to enhance service sustainability and economy. The company, established as an independent entity from Uber in 2021, has successfully executed numerous deliveries in collaboration with enterprise partners like Uber Eats and 7-Eleven. Serve has secured scalable multi-year contracts and has a deal to roll out up to 2,000 delivery robots across various U.S. markets for the Uber Eats platform.
The firm recently doubled its delivery capacity and robot fleet volume, significantly expanding its geographic reach and operational efficiency. Operational territories were broadened to include Downtown, Sawtelle, and Westwood areas in Los Angeles. By the end of Q2 2025, the company anticipates entry into the Dallas, Fort Worth, and Atlanta markets.
Serve’s third-generation robot design with significantly enhanced capabilities was completed. The new model can move approximately twice as fast, travel twice as far, and deploy five times more AI computing power at 50% of the earlier manufacturing cost. Post-year-end advancements have reduced manufacturing costs by 30%, making future third-generation robots 65% less expensive than their predecessors. The company started production in partnership with Magna International Inc., with the first 75 new third-generation robots successfully delivered in December 2024.
Lastly, the company’s partner network and operational performance saw substantial growth. Reach extended to more than 1,000 restaurants and 300,000 households. Shake Shack (SHAK) now offers robotic delivery and a new partnership with Wing Aviation to offer up to 6 miles of multi-modal delivery. In the fourth quarter of 2024, daily supply hours reached 455, a 94% annual increase year-over-year, and the company noted an 81% increase in daily active robots year-over-year.
Analysts Remain Bullish
The company’s financial standing considerably improved in 2024, as reflected in its revenue, which soared 773% year-over-year to $1.8 million.
The company completed a $167 million financing round, which boosted liquidity. It closed the year with a strong cash position, with $123 million on hand and no outstanding debt obligations. After year-end, it raised an additional $80 million through a registered direct offering.
Despite the declining share price, analysts covering the company remain bullish on its prospects. Serve Robotics is rated a Moderate Buy overall, based on the recent recommendations of two analysts. The average price target for SERV stock is $17.00, which represents a potential upside of 128.80% from current levels.
