Meet the Tiny Artificial Intelligence (AI) Company That Just Grew Its Sales by a Whopping 578%

Serve Robotics (NASDAQ: SERV) has a relatively modest market capitalization of $680 million, but it has big aspirations. The company develops autonomous last-mile logistics solutions to reduce the cost of making small-scale deliveries, which it believes could be a $450 billion opportunity by 2030.

Serve's latest Gen3 autonomous robot is already making food deliveries through DoorDash and Uber Eats, which is contributing to a surge in the company's revenue. In fact, its top line soared by an eye-popping 578% year over year during the first quarter, and management's guidance suggests even faster growth is ahead.

Serve stock is down 50% from its 52-week high, so could this be the ultimate buying opportunity for investors? The answer isn't exactly straightforward, and I'll explain why.

Image source: Getty Images.

Robots could be the future of last-mile logistics

It currently costs up to $10 to deliver food from a restaurant to a consumer through existing human-driven methods. Serve believes its Gen 3 autonomous robots can reduce that cost-per-delivery to just $1, lowering prices for consumers and increasing profit margins for restaurants and delivery platforms like Uber Eats and DoorDash.

Serve has deployed 2,000 robots across 20 U.S. cities so far. They are powered by Nvidia's Jetson Orin platform, which includes the hardware and software necessary to achieve Level 4 autonomy. This means Gen 3 robots can autonomously drive on sidewalks within designated areas, with zero human intervention.

In January, Serve acquired another company called Diligent, which developed a similar Nvidia-powered robot called Moxi. It was designed specifically for hospitals, where it transports medication, supplies, and lab samples across departments so nurses can spend less time running around and more time helping patients.

By adding Moxi to its fleet, Serve immediately unlocked a new market in healthcare and doubled its geographic footprint to 44 U.S. cities. But the company is far from done, as it plans to go global during 2026 and 2027, entering countries like Australia, Japan, Canada, and England.

Serve's first-quarter revenue just exploded higher

Serve generated $3 million in total revenue during the first quarter of 2026, which was a 578% increase compared to the year-ago period. The strong result was partly attributable to the inclusion of Diligent's revenue for the first time, which contributed to a tenfold increase in fleet revenue.

But Serve's growth could accelerate even further by the end of 2026, because management is forecasting $26 million in revenue for the year overall, which would be a near-tenfold increase compared to 2025.

All of that is very positive, but Serve is incurring significant losses to fund its growth. Its first-quarter operating expenses of $42.8 million far exceeded its revenue, resulting in a net loss of $49 million for the period. That followed a loss of $101.3 million in 2025 overall.

Serve had $197.4 million in cash and short-term investments at the end of the first quarter, so it can't afford to lose money at the current pace for much longer before it needs a cash injection. If it raises more money by selling equity, existing shareholders will face dilution, which could dent their future returns.

Serve stock isn't cheap, but it could reward long-term investors

Based on Serve's trailing 12-month revenue, its stock is trading at a sky-high price-to-sales (P/S) ratio of 113. That makes it over five times as expensive as Nvidia, which has a P/S ratio of 21.

However, if we assume Serve will generate $26 million in revenue this year as management expects, then its forward P/S ratio is much more palatable at 29. Plus, while it might be too early to look ahead to 2027, Wall Street thinks the company could nearly triple its revenue to over $77 million next year (according to Yahoo! Finance). That places its stock at a forward P/S ratio of just 9.8.

SERV PS Ratio data by YCharts

Therefore, investors looking for short-term gains over the next few months might be left disappointed, but those willing to hold Serve stock for the next couple of years (or preferably longer) could earn solid returns. However, it's impossible to predict how fast demand for robotic delivery will ramp up because the industry is still in the very early stages. Moreover, Serve hasn't proven its ability to execute at scale, which is a key risk going forward.

As a result, investors who choose to buy Serve stock today should make it only a small part of their portfolio to protect against any potential downside.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash, Nvidia, Serve Robotics, and Uber Technologies. The Motley Fool has a disclosure policy.