Pony AI Inc. (NASDAQ:PONY) has gained around 20% on premarket following the announcement that it had teamed with Tencent for autonomous driving technology.
The stock is now trading around 10% higher than it was at the time the article was published.
Pony will collaborate with the Shenzhen-headquartered giant on areas like “cloud services, mapping, and cockpit ecosystem technologies,” according to its press release on Friday.
Pony AI already has a license from Beijing’s regulatory authority to charge for their fully autonomous rides within certain parts of Shenzhen.
Pony AI’s stock price is down 60% from its high YTD in late February, despite today’s surge.
What is the impact of Tencent’s Pony AI partnership on Pony AI stocks?
The press release said that users in Shenzhen will be able book Pony AI Robotaxis from WeChat.
James Peng said that partnering with Tencent was a big step in the direction of the company’s commitment to scale up operations. This is because the giant has a large user base, and they are experts in cloud services, he explained in an interview on CNBC today.
Pony AI will be able to continue strengthening its position on the Chinese robotaxi market by working with Tencent.
Wall Street has currently given Pony AI stock a “buy” consensus rating.
Analysts expect robotaxi specialists to rise by an average of $20 in value at the moment.
Pony AI is struggling to grow its top line.
Zhong Xiangping is the Vice President of Tencent. According to him, partnering with Pony AI Inc. “marks a brand new beginning for collaborative innovation.”
WeChat is the company’s super-app, and it has over a billion users each month.
The Chinese startup may also benefit from a partnership with Tencent, as it is currently struggling to grow its revenue.
Pony AI’s robotaxi service revenue fell 62% year over year to $2.6million in its most recent reported quarter.
Please note that Pony AI does not pay dividends at this time.
Pony AI remains a high-risk investment
Pony AI’s growth in China is impressive, but investors are advised to tread carefully as this startup may be caught in the crossfire of the US-China Trade War.
Peng, the CEO of the company, has called the United States “hugely” important for its expansion plans.
In an interview with The Financial Times, he said that PONY is considering a second listing, as Washington could demand a removal of Chinese companies from the NYSE due to the ongoing trade war.
Pony AI’s tenure as an American-listed company, if it was delisted in fact, would have been less than six month.
Peng did not comment on the countries that were being considered for secondary listings.
The post Pony AI Stock: Tencent News Sends Robotaxi Specialist Up 20% On Friday could be updated as new information becomes available.
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