Why Serve Robotics Stock Surged Today
Key Points
An analyst at a prominent researcher initiated coverage of the next-generation robot maker.
That firm's analyst not only feels it's a buy, he believes its share price can nearly double.
Serve Robotics (NASDAQ: SERV) was serving up some shareholder gains on Thursday. The robot maker's stock price bounced 6% higher, thanks largely to an optimistic research note from an analyst initiating coverage on the company.
Launched with a buy
The new bull in Serve's pen is Oppenheimer's Colin Rusch. Before market open that day, Rusch inaugurated his tracking of the company by flagging it with an outperform (read: buy) recommendation and price target of $20 per share. That's nearly double the stock's most recent closing level.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Currently, Serve is best known for its fleet of boxy robots that zip around certain cities, delivering food. According to reports, Rusch believes that last-mile delivery services are only the first application of the company's technology. As such, he wrote, it can leverage its strong position in cityscape data into new designs. This should also help it save costs with new products and services.
Rusch also described the company as being a pioneer in the field of physical artificial intelligence (AI).
Promising but speculative
I'm inclined to agree with Rusch's inaugural take on Serve. I live in Los Angeles, and the company's delivery robots are an increasingly common sight -- to the point where they're now an accepted part of the city's landscape. This feels like technology that is easily and readily scalable, and can easily boost its developer's fundamentals.
Yet this remains a play only for investors with a high tolerance for risk. At the moment, Serve's revenue is thin, and its net losses are substantial. It's a very promising company but it won't give investors an easy ride.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Serve Robotics. The Motley Fool has a disclosure policy.