On May 18, 2025, NVIDIA Corp. (NASDAQ: NVDA) announced the latest updates and systems in its efforts to spur the development of humanoid robots. These tools, including new models for humanoid reasoning, motion, and skills, may contribute to what CEO Jensen Huang has described as the "next industrial revolution," made possible with physical AI and robotics.
As is often the case when NVIDIA makes moves in the direction of a particular technology, investors have turned their attention in response to a number of other firms working in the area of robotics.
While NVIDIA is one of a number of major tech and AI players involved in the development of hardware or software necessary for the advancement of robotics, investors keen on the potential for this technology can also turn to smaller, dedicated companies that may have stellar growth potential.
Two names in particular, Serve Robotics Inc. (NASDAQ: SERV) and Richtech Robotics Inc. (NASDAQ: RR), might be worth considering for those bullish on robotics as a field.
Rapid Expansion in a Critical Niche of the Delivery Industry
Serve Robotics is known for its self-driving delivery robots, which provide food delivery services throughout the United States. Through a partnership with Uber Technologies Inc. (NYSE: UBER), which it spun off from in 2021, Serve achieves a key advantage over other delivery services in its ability to complete the so-called "last-mile" challenge. It's easy to imagine Serve's purview, which includes a host of other delivery and logistics tasks.
Serve is undergoing a tremendous scale-up, so it's understandable that losses have been mounting. In the latest quarter, the company deployed 250 of its newest generation of robots and aims to have a fleet of 2,000 by the end of 2025.
So far this year, Serve has increased its daily supply hours by 40% over the final quarter of 2024, boosting delivery volume by more than 75% from the first week of the latest quarter to the last. It has also more than doubled its household reach since December while dramatically increasing its merchant partnerships.
Revenue remains low at $440,000 for the latest quarter, though this marks a 150% sequential improvement on a quarterly basis. Serve also expects second-quarter revenue to grow sequentially at a 35% to 60% pace.
Overall, Serve is rapidly expanding and building a desirable niche in a new segment of a popular industry. Investors may hesitate at the significant discrepancy between the company's revenue and its net losses, but the firm did end the first quarter with a record $198 million in cash on hand.
This should provide it ample room to continue to build out its operations.
It's no surprise, then, that all five analysts rating SERV shares have given them a Buy rating. The stock also has a consensus price target of $19.50, nearly double the current price levels.
Riskier Play on a Retail and Service Robotics Firm
Richtech Robotics creates robots to automate the service industry, including for delivery, cleaning, and other applications. Its products are designed for use in retail spaces, restaurants, hotels, casinos, medical facilities, and more.
Richtech has recently begun to shift from robot sales to a new robots-as-a-service (RaaS) model, expanding its addressable market to a size of roughly $230 billion. The company achieved 400 customer installations as of the latest quarter and aims to increase that figure by 150% by 2026.
The growing labor shortage in the service market provides a gap that Richtech seeks to fill with its robots and robot services. The company sees its robots being usable for up to 80% of jobs across the service industry.
For the trailing four-quarter period through the end of March of this year, Richtech reported $4.4 million in revenue and $6.5 million in secured RaaS contracts, as well as nearly $32 million in cash reserves on hand. However, the latest earnings report was lackluster, as the company missed earnings forecasts and recorded its widest-ever net losses.
The company also faces dilution due to warrant exercises. Combined, these make Richtech a riskier investment than Serve. Still, the firm has garnered Buy ratings from both analysts reviewing its stock, as well as upside potential of about 39%.