Can Nvidia Replicate Success Elsewhere?
Nvidia (NVDA 0.35%) has seen its stock price soar since the start of 2023, fueled by surging demand for its artificial intelligence (AI) chips. Flush with success, Nvidia has begun investing some of its wealth in other AI enterprises, including a $12 million investment in Serve Robotics (SERV -6.31%) between 2022 and 2024, a company specializing in autonomous last-mile logistics solutions.
However, Nvidia sold its entire position in Serve Robotics at the end of 2024. Despite this, Serve Robotics believes its addressable market will grow to an eye-popping $450 billion by 2030. The question is: could this be a buying opportunity for investors?
Serve Robotics and its Uber Eats Partnership
Serve Robotics believes existing last-mile logistics networks are incredibly inefficient because they rely on humans and cars to handle small commercial deliveries from restaurants and retail stores. The company thinks autonomous robots and drones are better suited to these workloads, and it says a shift to these solutions could create a $450 billion opportunity by 2030.
Serve's latest Gen3 robots have achieved Level 4 autonomy, so they can safely travel on footpaths without any human intervention. These robots are powered by Nvidia's Jetson Orin platform, which provides the necessary hardware and software.
Since launching its first pilot program in 2022, Serve's robots have made over 100,000 deliveries on behalf of 2,500 restaurants. The company aims to drive the cost-per-delivery down to just $1 when achieving scale.
Serve currently partners with Uber Technologies' (UBER -0.19%) Uber Eats platform, deploying 2,000 of its Gen3 robots. These robots are currently active in cities like Los Angeles, Miami, Dallas, and Atlanta, with plans to expand to Chicago.
Growth Potential and Risks
While Serve Robotics currently generates modest revenue, analysts anticipate significant revenue growth in the coming years. However, the company is currently incurring substantial losses, raising questions about its ability to achieve profitability in the future.
In the second quarter of 2025, Serve Robotics' revenue was just $642,000, a small figure compared to its market capitalization of $800 million. However, analysts expect the company's revenue to reach $3.6 million this year, a 99% increase compared to 2024. Management expects revenue to rise to $80 million once all 2,000 Gen3 robots are operational.
On the other hand, Serve Robotics reported a net loss of $33.7 million in the first half of 2025, following a loss of $39.2 million in 2024. Although the company had $183 million in cash at the end of the second quarter, it may need additional funding if it fails to achieve profitability within the next few years.
Company Valuation
Serve Robotics' valuation poses a challenge for investors. The company's stock is trading at a very high price-to-sales (P/S) ratio of 429, making it one of the most expensive companies in the AI space. This ratio is significantly higher than Nvidia's ratio of 26 and even Palantir Technologies' ratio of 133.
However, if management's expectations of achieving annual revenue of $80 million are met, the forward price-to-sales ratio will fall to around 10, an attractive valuation. In addition, if the last-mile delivery market actually grows to $450 billion by 2030, Serve Robotics has significant growth potential.
However, investors should be aware that corporate guidance is not always reliable. Therefore, it may be best to wait until next year to evaluate the performance of Gen3 robots and assess whether management's expectations will be met.
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