SAN FRANCISCO - Serve Robotics Inc. (NASDAQ:SERV), an autonomous sidewalk delivery company, has solidified its partnership with Magna International (NYSE:MGA) Inc. (TSX: MG; NYSE: MGA), one of the largest global automotive suppliers, to enhance the production of delivery robots.
The announcement today marks the initiation of an exclusive contract manufacturing agreement that will enable Serve to expand its robot fleet for Uber (NYSE:UBER) Eats and other markets in the U.S.
This strategic move comes after a licensing agreement on February 20, 2024, where Serve allowed Magna to use its leading-edge technologies to develop new robotic products. The extended collaboration is set to advance Serve's deployment plans, potentially introducing up to 2,000 robots on the Uber Eats platform across various U.S. locations.
Ali Kashani, CEO of Serve Robotics, expressed enthusiasm about leveraging Magna's manufacturing excellence to scale up Serve's robotic fleet. This step is expected to broaden the application of Serve's robotics technology beyond food delivery.
Matteo Del Sorbo, Executive Vice President of Magna, echoed this sentiment, highlighting Magna's eagerness to support Serve's growth through their manufacturing and technical prowess.
Serve Robotics, backed by industry giants Uber and NVIDIA (NASDAQ:NVDA), specializes in AI-driven, low-emission sidewalk delivery robots designed to make delivery processes both sustainable and cost-effective. Since its spinoff from Uber in 2021, Serve has successfully completed numerous deliveries for partners like Uber Eats and 7-Eleven and has secured scalable multi-year contracts.
The information for this article is based on a press release statement from Serve Robotics Inc.
InvestingPro Insights
In light of Serve Robotics Inc.'s (NASDAQ:SERV) recent strategic partnership with Magna International Inc (TSX:MG)., a closer look at the company's financial health and market performance is essential. The InvestingPro data reveals that Serve Robotics has experienced a substantial 92.49% revenue growth in the last twelve months as of Q4 2023, indicating a strong expansion trajectory.
Still, this growth is juxtaposed with a concerning gross profit margin of -733.68%, underscoring the challenges the company faces in converting revenue into actual profit.
The market's reaction to Serve's performance and prospects can be seen in its stock price volatility. An InvestingPro Tip notes that the stock has taken a significant hit, with a 40.19% drop in the one-week price total return as of the current year.
Moreover, the stock has seen a drastic 87.32% fall in its price total return over the last six months. This level of volatility suggests that investors have been reacting strongly to both positive news, such as the partnership with Magna, and underlying financial concerns.
Investors considering Serve Robotics as part of their portfolio should also be aware of the company's short-term financial obligations exceeding its liquid assets, as highlighted in another InvestingPro Tip. This could indicate potential liquidity risks that might affect the company's operational flexibility. For those looking for more detailed analysis and additional InvestingPro Tips, there are 13 more tips available on Serve Robotics at Investing.com/pro/SERV. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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