Hype around the Nvidia partnership faded.
Shares of Serve Robotics (SERV) took a dive last month as investors seemed to think the stock had been previously overbought. A brief pop in the restaurant-delivery robot company’s second-quarter earnings report wasn’t enough to counteract the downward momentum after Nvidia took a stake in the robotics company.
According to data from S&P Global Market Intelligence, the stock finished August down 52% on the news. As you can see from the chart below, the stock fell in most of its sessions last month.
SERV data by YCharts.
Serve Robotics still has a lot to prove
The main piece of news out from the company last month was its Q2 earnings report. Serve is still a development-stage company at this point, so its numbers don’t tell the whole story, but they’re still meaningful.
Revenue soared from the quarter a year ago to $468,375, though it was down sequentially as it wound down its services contract with Magna, a Canadian auto parts company.
Serve’s daily active robots, or the number of robots performing daily deliveries, continued to increase, more than doubling to 48 active robots, and daily supply hours, or the average number of hours the robots are available jumped from 152 to 385.
At the same time, Serve also announced a new autonomous robot-delivery pilot with Shake Shack in Los Angeles. The new project will operate through Uber Eats, leveraging its previous agreement, which aims to deploy up to 2,000 robots on the Uber Eats platform.
Serve Robotics’ lock-up period also expired at the end of July, which could have triggered some of the selling, but the main reason for the stock’s decline last month is that it was essentially unknown before it soared on July 19 after Nvidia disclosed a stake in the company.
Even after the pullback in August, the stock has essentially tripled from where it was trading before the Nvidia deal was announced.
Image source: Serve Robotics.
What’s next for Serve Robotics
Serve’s valuation is still astronomical as it has minimal revenue, and it expects revenue to decline sequentially into Q3 as its contract with Magna has lapsed. Magna had been the primary source of its software-services revenue, which made up the majority of its revenue in the first half of the year.
At this point, Serve’s technology seems promising as does its partnership with Nvidia, but the business is too small to fully evaluate.
Serve could still be several years from generating meaningful revenue, let alone a profit.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Uber Technologies. The Motley Fool has a disclosure policy.
