Since the launch of OpenAI’s ChatGPT in November 2022, which gained 100 million users in just two months, artificial intelligence (AI) has reshaped industries and ignited widespread investor excitement.
This breakthrough fueled a rally in AI stocks, but the sector is set to expand dramatically, growing from $184 billion in 2024 to $826 billion by 2030, according to Statista. Analysts view AI as a potential multi-trillion-dollar market, drawing significant investment into the space.
While many AI companies may struggle to survive the competitive landscape, others hold the promise of delivering substantial wealth to shareholders. Investors keen on tapping into this transformative trend are flocking to AI stocks, seeking the next big winner. Below is one AI stock Wall Street analysts unanimously agree has the potential to make you rich.
Serve Robotics (SERV) was plucked from obscurity last July when Nvidia (NVDA) revealed it had taken a $4 million stake in the maker of AI-powered self-driving delivery vehicles for last-mile deliveries.
Founded in 2017 as the robotics unit of third-party delivery company Postmates, SERV stock went public on the Nasdaq exchange in April 2024 as an uplisting from the pink sheets. Three months later, just before Nvidia's investment, SERV had a market cap under $100 million and was trading for less than $2.50 per share.
The AI chipmaker's 1 million-share stake rocketed the robotics stock to the forefront of investor consciousness and SERV stock would 10x in a matter of weeks, hitting an all-time high of $24.35 per share.
The euphoria quickly wore off and the stock settled down to the $10 per share range. Institutional investors, however, became intrigued and a 4.2 million share, $80 million SERV stock offering was quickly sold out. Unfortunately, only weeks later, Nvidia revealed it had dumped its entire position and the stock, which had been testing its highs again, cratered.
Today, SERV trades at $7.05 per share with a $400 million valuation. Wall Street, though, is unanimous Serve Robotics can still make investors very rich. Of the five analysts covering SERV, there is a consensus strong buy rating and they have a one-year price target of $19.50 per share, implying 177% upside.
While the low-end price is $16 a share – still a better than 125% gain – the high-end forecast set in February by Northland Securities analyst Michael Latimore, sees SERV stock hitting $23 per share. Is that just wishful thinking, or is there more to Serve Robotics' story that can push its stock higher again?
At the end of 2024, Serve Robotics operated a fleet of over 100 robots, but expects to deploy 2,000 robots by the end of this year because of its platform-level integration with Uber Eats.
Uber Technologies (UBER) is the largest investor in Serve Robotics. Uber's Q4 13F filing showed the ride-share giant owned 5.3 million shares of SERV stock worth $71 million, though at today's price, it's about half of that, or $37.4 million. It's Uber's smallest investment, just 0.7% of its $5.5 billion portfolio, but could it be one of its biggest opportunities?
Last-mile delivery is expensive compared to cross-country delivery, and Uber currently splits its delivery revenue with its drivers. It has been exploring self-driving cars for its ride-share business to keep more revenue for itself, and delivery robots are in line with that thinking. There are also fewer regulatory hurdles than for a drone delivery service.
The jury is still out, but I'm doubtful Serve Robotics will make you rich. Its robots have only a two-mile delivery range and have to navigate sidewalks without hitting pedestrians and cross potentially busy intersections without colliding with cars. Although the robots can maneuver appropriately, responding to the human factor could be a limitation, which will limit the environments they can operate in. There are also some places they just won't be able to operate to protect them from vandalism and damage.
Serve Robotics is partnering with Wing Aviation to hand off deliveries to drones to extend the delivery range out to six miles, but that is an added step in the process that adds potential risk and cost.
Serve is unprofitable, though revenue is growing, surging 773% in the fourth quarter to $1.8 million. It reports Q1 earnings on May 8.
Although Wall Street is unanimous, I'm not certain this is a long-term investment. While there are certainly markets for its technology – food court delivery in shopping malls, hotel concierge services, etc. – I have difficulty seeing Serve Robotics as a widespread solution to last-mile delivery.
