Serve Robotics Surges 103% in a Month: What Should Investors Do?

Serve Robotics’ SERV shares have surged 103.1% in the past month, outperforming the broader Zacks Computer and Technology sector and the Zacks Computers - IT Services industry’s growth of 22.6% and 20.8%, respectively, reinforcing its position as a standout performer in the autonomous delivery space.

SERV’s shares have also outperformed its industry peers, including Clarivate CLVT and Fair Isaac FICO. Shares of Clarivate and Fair Isaac have gained 34% and 21.5%, respectively, over the same time frame.

The rally reflects strong investor confidence in Serve’s operational momentum, marked by sharp growth in revenues, fleet expansion, delivery volume and geographic footprint during the quarter.

SERV Prospects Ride on Market Expansion and Contract Wins

Serve Robotics is rapidly scaling presence across key U.S. markets, reinforcing its position as a leader in autonomous sidewalk delivery. During the first quarter of 2025, the company expanded operations into Miami and Dallas while significantly broadening its footprint in Los Angeles, now covering more than 320,000 households, a 110% increase since December 2024. 

Serve Robotics Inc. Price and Consensus

Serve Robotics Inc. price-consensus-chart | Serve Robotics Inc. Quote

SERV’s commercial traction has gained meaningful momentum, highlighted by a surge in merchant partnerships. The company now serves more than 1,500 merchants, a 50% quarter-over-quarter increase and a fivefold rise year over year. This sharp growth signals strong market acceptance of its delivery platform, driven by its reliability, sustainability and operational efficiency.

Serve Robotics achieved a major operational milestone in the first quarter of 2025 with the successful deployment of more than 250 third-generation delivery robots, meeting its primary quarterly target. This rollout led to a more than 40% increase in daily supply hours compared with the previous quarter, marking a significant enhancement in the company’s delivery capacity and overall scalability.

These advancements keep SERV firmly on track to reach its ambitious goal of deploying 2,000 robots by year-end. The company's momentum is further reinforced by its landmark partnership with Uber Eats, one of the world’s leading food delivery platforms operated by Uber Technologies UBER. This contract, among the largest in the autonomous delivery space, reflects both the commercial appeal and growing market relevance of Serve’s platform.

SERV Provides Strong Q2 Momentum

Amid ongoing macroeconomic headwinds, Serve Robotics has issued a strong outlook for the second quarter of 2025, signaling continued momentum in its growth strategy.

The company now expects second-quarter 2025 revenues to be between $0.60 million and $0.70 million ($600K to $700K). The Zacks Consensus Estimate for revenues is pegged at $0.64 million, indicating 35.11% year-over-year growth.

The consensus mark for the second-quarter 2025 bottom line has remained stable at a loss of 23 cents in the past seven days. This indicates a narrower loss from the year-ago quarter's loss of 27 cents.

Financial Headwinds Limit SERV’s Growth

Despite strong operational momentum, Serve Robotics remains burdened by financial headwinds, including persistent net losses and elevated operating costs, which are challenging its path to profitability. In the first quarter of 2025, the company reported a net loss of $13.2 million, up from $9 million in the year-ago quarter, reflecting increased investments in scaling its robot fleet and expanding market reach.

Worsening supply-chain disruptions and the increased burden of tariffs are further inflating Serve Robotics' cost structure. These external pressures are making this increasingly difficult for the company to manage expenses effectively, underscoring the urgent need for stronger cost discipline and smarter sourcing strategies to preserve operational efficiency as it scales toward long-term growth.

Conclusion: Hold Serve Robotics Stock for Now

Serve Robotics shows strong operational momentum with expanding market reach, a growing fleet and solid revenue guidance, all of which highlight its leadership in autonomous delivery. However, persistent net losses, high operating costs and external pressures from supply-chain disruptions and tariffs continue to pose financial risks.

Considering the balance of growth potential and ongoing challenges, a cautious hold strategy appears prudent for investors at this stage.

SERV currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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