The stock of Serve Robotics Inc. (NASDAQ : SERV), a company that specializes in sidewalk robots with low emissions, soared by 140% after Nvidia Corp. (NASDAQ : NVDA) announced it had purchased a significant stake.
Nvidia’s strategic investment
Nvidia spent over $3.7million to buy just under 1 million Shares of Serve Robotics. This was revealed in a Friday filing.
The average share price is $2.42. Nvidia made its initial investment in Serve Robotics in July 2023. In April of this year the company exchanged a promissory notes into 1,05 million SERV shares.
Reaction and surge in market volume
After the announcement, Serve Robotics saw its stock trading volume increase dramatically.
At the time this article was written, over 120 million shares were traded, a volume that is significantly greater than the daily average of about half a million.
Nvidia shares fell by 1.0% Friday but news of the investment in Serve Robotics sent them soaring.
Strategic partnerships and ownership
Nvidia owns around 10% of Serve Robotics. Postmates is another notable investor. It’s a subsidiary company of Uber Technologies Inc. and one of its largest shareholders.
Serve Robotics was listed on the Nasdaq as of April after going public in March.
Investor Caution
Investors are advised to be cautious due to the volatile market.
Stock in Serve Robotics, valued at $2.63 as of Thursday’s close, may lose value as fast as it gains.
SoundHound AI – Comparison
Nvidia invests heavily in artificial intelligence companies.
Nvidia’s $3.7 million investment in SoundHound AI led to a brief rise in the stock price.
SoundHound AI stock is currently trading at just over $5.
It is unclear whether Serve Robotics will be able to maintain its Nvidia gains over the next few weeks.
Financial performance
Serve Robotics, which has an agreement with Magna, reported a revenue of $95 millions in May.
The remaining 35 million dollars from this deal are expected to be realized by Q2 2024.
Stock prices for AI ventures are on the rise. The surge of Serve Robotics following Nvidia investment is a good example.
Investors should be cautious, however, due to the volatility of the stock and similar experiences with other companies.
The post Serve Robotics shares soar 140% following Nvidia’s major stake reveal may be updated as new information becomes available.
