Serve Robotics stock soars 241% after Nvidia takes $4 million stake in the company

• Serve Robotics' shares soared 241% after Nvidia disclosed a stake in the company.
• Nvidia's $3.7 million investment in Serve is a convertible debt note that was converted in April.
• Serve Robotics focuses on self-driving delivery vehicles for last-mile deliveries.

Shares of Serve Robotics soared as much as 241% on Friday after Nvidia disclosed a stake in the company.

According to a Form 4 filing made with the SEC on Thursday, Nvidia purchased 1.05 million shares of Serve at a price of $2.42 per share in April, representing a total investment worth just over $3.7 million.

The stock purchase was pursuant to a 6.0% convertible debt note that Nvidia held on the company. The bond was converted to stock following Serve Robotics public debut in April.

Serve Robotics was founded in 2017 and develops and operates self-driving vehicles focused on last-mile delivery.

The automated delivery boxes travel via sidewalks and often deliver food orders for delivery platforms like Uber Eats.

"Why deliver 2 pound burritos in 2 ton cars?" Serve asks on its website.

Serve Robotics is small, with a market valuation of about $275 million on Friday. Before the surge on Friday, it was worth just under $100 million. The company generated revenue of just $1 million over the past year.

According to Serve's May 2024 investor presentation, Nvidia has invested just over $12 million in the company. Other investors include 7-Eleven and Uber, who invested $11.5 million in Serve Robotics.

The company launched its operations in Los Angeles as the first test city. As part of its "next phase" of expansion, it is considering new deployments in San Diego, Dallas, and Vancouver.

This isn't the first time Nvidia has disclosed investments in early-stage companies focused on AI and robotics.

In February, Nvidia disclosed relatively small investments in SoundHound AI and Nano X Imaging, resulting in similarly big stock price moves.