Serve Robotics Inc (NASDAQ: SERV) shares powered 26% higher to $17.27 in midday trading on Thursday after the autonomous sidewalk delivery company announced a new multi-year strategic partnership with DoorDash to roll out autonomous robot deliveries across the US.
The agreement will see Serve’s autonomous sidewalk robots begin delivering orders placed via the DoorDash app in Los Angeles first before expanding nationwide over time.
Wedbush analysts, in a note to clients, lifted their target price on Serve Robotics stock to $22 per share from $15, reflecting incremental momentum in the company’s growth story.
“Serve is leveraging its first-mover advantage, deep industry partnerships, and proprietary autonomy stack to differentiate itself from both traditional delivery services and emerging robotics competitors with demand growing across the autonomous last-mile delivery driven by rising consumer expectations for fast, contactless delivery at lower costs," the analysts wrote.
They believe Serve Robotics is strongly positioned to gain market share due to the company’s plans to grow its autonomous robot fleet to 2,000 by the end of 2025, establish new partnerships, and launch operations in additional cities with favorable regulatory environments.
The analysts added that the prospects for Serve Robotics are boosted by rising demand for automation, operational efficiency, and sustainable delivery solutions.
They also stated that Serve Robotics is building multiple revenue streams starting with delivery then expanding its capabilities to other revenue avenues including software services and advertising, providing multiple ways to generate stable top-line growth.