Nvidia Just Invested in a New AI Stock. Is It a Buy?

There’s no question about it. Nvidia (NVDA -3.70%) has been the most closely watched stock of the AI boom.

It’s easy to see why. Nvidia has added more than $2 trillion in market value since the start of 2023, entering an exclusive echelon of the world’s most valuable companies shared only with Apple and Microsoft.

However, in addition to the company’s own success in leading the AI chip revolution, it also carries a small investment portfolio, and a company as influential as Nvidia has the potential to move the needle with its stock purchases. Its biggest holding is Arm Holdings, the CPU architecture specialist that Nvidia works closely with. When it purchased shares of Soundhound AI in the first quarter, shares of that stock surged on the news.

In the second quarter, Nvidia bought just one stock, Serve Robotics (SERV -5.74%), a maker of food delivery robots that operate in public spaces. The stock jumped 9.6% on high-volume trading when news broke that Nvidia purchased 3.7 million shares in the second quarter, worth roughly $4.3 million today, or 10% of the company’s market value.

Image source: Serve Robotics.

What is Serve Robotics?

Serve Robotics is a small AI and robotics company founded in 2021 that finished 2023 with just 67 employees. CEO Ali Kashani was previously a vice president at Postmates, an on-demand food delivery platform acquired by Uber (UBER -0.23%). Prior to that, he was the co-founder and chief technology officer at a smart home technology acquired by Generac, a maker of generators.

You may have seen Serve Robotics’ autonomous delivery vehicles on the street. Uber Eats partnered with the company to test out delivery by robot in Los Angeles, and Serve also counts companies such as Yum! Brands’ Pizza Hut, Shake Shack, and 7-Eleven as customers. In addition to being a major customer, Uber is also an investor in the company.

Serve Robotics is essentially just a development-stage company at this point. It reported $468,375 in revenue in the second quarter, but that was up 655% from the quarter a year ago.

The company had 48 “daily active robots” in the second quarter, meaning that was the average number of robots performing daily deliveries, more than doubling from 23 in the quarter the year before.

Serve also reported a $9.1 million operating loss in the quarter, as it’s spending most of its money on research and development. The company finished the quarter with $28.8 million in cash and $4.3 million in total liabilities after raising $40 million in its second-quarter IPO.

It’s aiming to deploy at least 250 more robots in Los Angeles by the end of the first quarter of next year. It also expects to have 2,000 robots active with Uber Eats by the end of 2025, which it said would generate $60 million to $80 million in annual revenue.

Is Serve Robotics stock a buy?

At this point, Serve Robotics is a high-risk/high-reward type of stock. With less than $1 million in quarterly revenue, the company can’t really be judged by its financials, but robotics, including delivery robots, is an emerging industry. The addressable market seems large as there’s a clear financial incentive for a company like Uber to make robotic food delivery work as it would eliminate the existing labor costs.

Having both Uber and Nvidia, the leading ride-sharing platform and chipmaker, as investors is also a credit to the company, and those relationships should give the company a competitive advantage over other robotics. Potentially, it will give Serve preferred access to Nvidia chips and technology and make room for more collaborations with Uber.

With those relationships and a leading position in an emerging technology, Serve Robotics has a lot of upside potential. Taking a small position in the stock right now would make sense for risk-tolerant investors looking to round out their AI stock holdings.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Uber Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.