Nvidia Corp (NASDAQ:NVDA), the renowned semiconductor company, made a notable investment by purchasing common stock of Serve Robotics Inc., a company specializing in miscellaneous transportation equipment. The transaction, which took place on July 31, 2023, involved Nvidia Corp acquiring 62,500 shares at a price of $4.00 per share, totaling $250,000.
This investment has increased Nvidia Corp's ownership in Serve Robotics to 2,676,904 shares of common stock. Notably, this purchase was part of a private placement, as indicated by the footnotes in the SEC Form 4 filing.
Additionally, Nvidia Corp's involvement with Serve Robotics extends beyond this recent purchase. According to the same filing, Nvidia Corp had previously converted a 6.00% Convertible Promissory Note into common stock of Serve Robotics Inc. This conversion, which occurred in connection with Serve Robotics' public offering in April 2024, resulted in Nvidia Corp receiving 1,050,129 shares at a conversion price of $2.42 per share, amounting to a total of $2,541,312.
The transactions reflect Nvidia Corp's strategic investments and its relationship with Serve Robotics, as it continues to expand its portfolio within the technology and transportation sectors. Investors and market watchers will be keen to see how this investment plays out in the context of Nvidia's broader market activities.
For those tracking stock movements, Serve Robotics Inc. trades under the ticker symbol NASDAQ:SERV.
In other recent news, Serve Robotics Inc. has made significant strides in its expansion and technological enhancement efforts. The company has extended its autonomous delivery operations into Koreatown, Los Angeles, and has updated its lidar supply agreement with Ouster, Inc. to upgrade its robotic fleet's sensors. These developments align with Serve's strategy to increase its service reach across the U.S.
Euan Abraham has been promoted to Chief Hardware & Manufacturing Officer at Serve Robotics, reflecting his considerable contributions to the company. His new role is expected to drive innovation as the company enters its next phase of growth. Additionally, Serve has solidified its partnership with Magna International (TSX:MG) (NYSE:MGA), marking the initiation of an exclusive contract manufacturing agreement. This collaboration is set to facilitate Serve's expansion of its robot fleet for Uber (NYSE:UBER) Eats and other U.S. markets.
These recent developments are part of Serve Robotics' strategic moves to enhance its robotic fleet and broaden the application of its robotics technology. The company's growth plan includes deploying up to 2,000 AI-powered, low-emission robots in U.S. markets by 2025. The plan is backed by scalable multi-year contracts and partnerships with major firms like Uber, NVIDIA, and Magna.
InvestingPro Insights
Nvidia Corp's recent investment in Serve Robotics Inc. comes at a time when Serve Robotics' financial metrics and market performance paint a complex picture. According to real-time data from InvestingPro, Serve Robotics has a market capitalization of $86.05 million, which is relatively modest in comparison to industry giants. Despite an impressive revenue growth of 742.6% over the last twelve months as of Q1 2024, the company's financial health is challenged by a negative gross profit margin of -53.99%, indicating that it spends more to produce its goods than it earns from their sale.
Investors looking at Serve Robotics' stock should note its high revenue valuation multiple and substantial price volatility. An InvestingPro Tip highlights that the stock has experienced a significant decline over the last year, with a year-to-date price total return of -90.64%. Additionally, Serve Robotics is not currently profitable, with a reported operating income margin of -2041.54% for the same period. This data suggests that while the company's sales are growing, its current cost structure and operational efficiency are areas of concern.
However, there is a silver lining for those considering the long-term potential of Serve Robotics. The company has seen a strong return over the last month, with a 14.15% price total return, reflecting a potential rebound or correction in investor sentiment. For those interested in a deeper analysis, there are over 15 additional InvestingPro Tips available, which can provide further insights into Serve Robotics' financial health and market position. By visiting https://www.investing.com/pro/SERV and using the coupon code PRONEWS24, investors can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to a wealth of expert financial analysis and tips.
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