Why Pony AI Trounced the Market on Tuesday With a Nearly 6% Gain

The U.S.-listed equity of Chinese autonomous-vehicle developer Pony AI (NASDAQ: PONY) accelerated well higher on Tuesday. Following the company's unveiling of its latest quarterly results, investors in this country sent its American depositary receipts (ADRs) almost 6% higher. That was miles ahead of the S&P 500 index's 0.4% decline.

One fast Pony

In its first quarter, Pony AI collected a bit under $14 million in revenue, up by nearly 12% from the slightly more than $12.5 million in the same period of 2024. Its adjusted net loss deepened to almost $34 million, against the $25.4 million deficit in the year-ago quarter. Thanks to a much higher ADR count, however, the net loss per ADR narrowed considerably, to $0.10 from $0.28.

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In this country, Pony AI is not a title closely followed by analysts, so consensus estimates were not available.

The company's revenue improvement stemmed from a 3% improvement in robotruck services and licensing, the activity that comprises nearly 90% of its top line. A difference maker in the quarter was robotaxi services, which nearly tripled -- albeit from a low base -- to bring in over $1.7 million. The higher costs were due to the mass production of its current generation of self-driving vehicles.

A heavy foot on the accelerator pedal

Pony AI has vaulting ambition for the future.

It quoted CEO James Peng as saying that "As we accelerate production and drive cost efficiency through technological advancement, the unveiling of seventh-generation autonomous driving system enables us to reduce bill-of-materials costs by 70% compared to its predecessor, strongly bolstering our confidence to expand the fleet to 1,000 vehicles by year-end."

Given the company's rapid expansion so far, and the Chinese government's zeal for next-generation transportation solutions, I think these goals are achievable. This is certainly an investment to watch.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.