Shares of Serve Robotics jumped more than 9% on the first trading day of 2026, driven by renewed enthusiasm for AI-powered delivery solutions. The stock had declined by nearly 23% through 2025, but the early-year rally underscores investors’ appetite for companies positioned at the intersection of robotics and last-mile logistics. Trading volume reached approximately 234,000 shares by midday, well above typical daily volumes, as market participants repositioned ahead of several anticipated catalysts later this year.

Northland Securities analyst Michael Latimore reiterated an ‘outperform’ rating on Serve Robotics, setting a target that implies more than 150% upside relative to year-end levels. Latimore cited a ‘myriad of 2026 catalysts,’ including new commercial partnerships, software enhancements and expanded deployment agreements, as key drivers that could propel the stock higher. His bullish stance contrasts sharply with the stock’s sub-par performance in 2025 and reflects broader optimism around physical AI stocks.

Serve Robotics reported achieving its 2025 goal of deploying over 2,000 autonomous delivery robots across multiple U.S. markets, including recent expansions into at least five additional municipalities. The company also enhanced its machine-vision algorithms, improving obstacle detection by 15% and increasing on-route reliability to 98% in pilot programs. These operational milestones lay the groundwork for scaling sidewalk autonomy at urban scale, with management targeting a 60% increase in active robots by year-end 2026.

Despite strong operational momentum, Serve Robotics remains unprofitable and continues to burn cash, with a negative gross margin reported in the latest quarter. The company has yet to generate positive free cash flow and relies on equity financing to fund expansion. Investors should weigh the high growth potential against runway constraints and execution risks, making the stock suitable primarily for those with elevated risk tolerances.