Key Takeaways
- Serve Robotics, a maker of food delivery robots, has received a significant boost in name recognition after being featured by Nvidia CEO Jensen Huang at the CES.
- The company is working to deploy drones and sidewalk-navigating robots to facilitate the $450 billion last-mile food delivery market.
- Serve Robotics has partnered with prominent companies such as Uber, 7-Eleven, and DoorDash to roll out deliveries nationwide.
- The company is growing rapidly, with revenue increasing 209% in the third quarter, but is still far from profitable.
- Wall Street is extremely bullish on the stock, with all seven analysts offering an opinion rating it a buy and an average price target of $19.
Introduction to Serve Robotics
Artificial intelligence (AI) has been a major trend in recent years, with advances in generative AI taking the world by storm. Nvidia has been one of the biggest beneficiaries of this trend, with its graphics processing units (GPUs) becoming the standard for powering sophisticated algorithms. As quoted by Jensen Huang, "The next generation of AI is physical AI." This is where Serve Robotics comes in, a company working to deploy drones and sidewalk-navigating robots to facilitate the $450 billion last-mile food delivery market. As Huang said, "I love these guys!" referring to Serve Robotics, which boasts the largest sidewalk delivery fleet in the U.S., with over 2,000 robots.
Growth and Expansion
Serve Robotics is growing like wildfire, with revenue increasing 209% in the third quarter to $687,000. However, the company is still far from profitable, with a loss of $33 million surging nearly fourfold. Despite this, management says it’s on track to increase revenue tenfold in 2026, based on preliminary projections. The company’s operational metrics are telling, with delivery volume increasing 66% quarter over quarter and 300% year over year. Serve Robotics currently serves customers in Chicago, Dallas, Miami, and Los Angeles, with a current market of more than 3 million people and 1 million households. As the company expands geographically, it plans to deploy more than 1 million food delivery robots.
Partnerships and Valuation
Serve Robotics has partnered with prominent companies such as Uber, 7-Eleven, Shake Shack, and DoorDash to roll out deliveries nationwide. The company has also recently entered into a multi-year strategic partnership with DoorDash to expand its reach. Nvidia is a strategic partner and former investor, which might explain Huang’s love for the company. However, Serve Robotics’ valuation leaves much to be desired, trading for more than 400 times sales as of this writing. As Northland Capital Markets analyst Michael Latimore said, "Via physical AI, their virtual driver steers delivery robots through public spaces and produces a huge return on investment (ROI)." Latimore named Serve Robotics a top pick for 2026, suggesting there’s a bright future ahead for the company.
Wall Street’s Take
Wall Street is extremely bullish on Serve Robotics, with all seven analysts offering an opinion rating it a buy. The average price target on the stock is roughly $19, implying additional upside of 28%. Latimore is even more bullish, with a Street-high price target of $26, representing potential upside of 77% for investors over the coming year. As he said, "[Serve Robotics] is one of the best investments in physical AI, we believe, and has myriad 2026 catalysts." While Wall Street is sold on the stock, investors should tread carefully, considering the company’s lack of profitability and high valuation.
Investment Potential
For investors intrigued by Serve Robotics’ prospects and looking to get in on the ground floor, adding a small position as part of a well-balanced portfolio wouldn’t go amiss. If the company can increase revenue tenfold in 2026, as management expects, it might well be worth a small investment. As Latimore said, the company has "myriad 2026 catalysts" that could drive growth. However, investors should be cautious, considering the risks associated with investing in a company that is still far from profitable. As the company continues to expand and deploy more robots, it will be essential to monitor its progress and adjust investment strategies accordingly.
https://www.fool.com/investing/2026/01/13/nvidia-ceo-jensen-huang-loves-this-artificial-inte/