Serve Robotics on Thursday announced a partnership with DoorDash, the most popular food delivery service in the U.S., which will use Serve's delivery robots in select locations. Serve stock jumped on the news.
The alliance will begin with Serve robots delivering meals from restaurants to customers in Los Angeles. L.A. residents ordering through the DoorDash app from participating merchants now may have their order delivered by one of Serve's sidewalk robots.
Serve Robotics currently has 1,000 robots making deliveries in Los Angeles, Miami, Dallas, Atlanta and Chicago. The company has completed more than 100,000 deliveries from over 2,500 restaurants to date. It also has a delivery deal with Uber Technologies unit Uber Eats.
"We've gone from one city to five since the beginning of the year and from 100 robots to 1,000," Serve Robotics Chief Executive Ali Kashani told Investor's Business Daily. "By the end of the year, we should have 2,000. And our hope is that all those robots would be working for DoorDash."
Serve operates its robots as a service and charges on a per-delivery basis, Kashani said.
Built by Magna International, Serve's autonomous vehicles are powered by Nvidia AI processors. They operate mostly on sidewalks but cross streets at intersections. Their top speed is 11 miles per hour.
The median delivery distance for Serve robots is 1.3 miles, Kashani said. And the time from pickup to drop-off takes about 18 minutes, he said.
Further, Serve Robotics deliveries have a better completion rate than human drivers, he said. Plus, consumers like dealing with robots because they don't have to tip, Kashani said.
Serve Robotics Stock Rises On News
On the stock market today, Serve Robotics stock soared 28.6% to close at 17.68. DoorDash stock dropped 2% to 275.44.
In the second quarter, Serve Robotics generated $600,000 in revenue, up 37% year over year. Its per-share loss widen to 24 cents from 14 cents a year earlier. The company is in growth mode and hasn't forecast when it expects to turn a profit.
Analysts polled by FactSet see Serve's revenue ramping from $3.6 million in 2025 to $31.3 million next year.
One goal of Serve Robotics is to drive down the cost of last-mile deliveries, which is about $10 for human drivers today.
"If you can bring that $10 down to a dollar, which is our objective, you can imagine how many new ways people are going to want to use these robots for last mile," Kashani said.
Serve stock has an IBD Relative Strength Rating of 88 out of 99, according to IBD Stock Checkup. That puts it in the top 12% of stocks for performance in the past 12 months.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
