Serve Robotics (NASDAQ: SERV) Surges as Nvidia Backs Automation Firm
Serve Robotics, a food-delivery robotics specialist, experienced a significant surge in value on Tuesday, becoming one of the top-trending equities. This positive momentum follows a severe selloff in the market on Monday. The tech giant Nvidia (NASDAQ: NVDA) has shown support for Serve Robotics, which has captured the attention of retail investors due to the possibility of a short squeeze.
In July, Nvidia’s disclosure of its stake in Serve Robotics caused the stock to nearly triple in value. Nvidia converted a promissory note into 1.05 million shares of Serve Robotics at $2.42 per share in April. Additionally, the company purchased 62,500 shares of Serve at $4 each on July 31. This news sparked a frenzy of activity around SERV stock, driving its price to a peak of $19.39 on July 29.
Despite initial concerns in the tech sector leading to a dip in SERV stock, positive market sentiment has returned, fueling its current rise. Serve Robotics, with a market capitalization of $692 million, has seen a 600% increase in performance over the past month, although it is down 34% since its first public close.
Serve Robotics has garnered support from major backers such as Nvidia and Uber, with Uber being its largest shareholder and commercial partner. The company has also partnered with Pizza Hut Canada, owned by Yum! Brands. However, Serve Robotics has attracted some skepticism, with a notable 9.4% short interest in its float. Fintel’s Short Squeeze Score rates SERV stock at 89.6 out of 100, indicating a higher probability of a short squeeze occurring.
With a small float of 17.55 million shares and a potential shortage of shares available for shorting, a rise in SERV stock could trigger a short squeeze. Options flow data reveals strong bullish sentiment among derivative market traders. Overall, the future of SERV stock remains uncertain, with the potential for further volatility in the market.
In conclusion, Serve Robotics’ recent surge in value, backed by Nvidia and other major investors, presents both opportunities and risks for investors. The possibility of a short squeeze adds an element of unpredictability to the stock’s performance. It is essential for investors to carefully assess their risk tolerance and investment goals before considering SERV stock as part of their portfolio.