Shares of Serve Robotics Inc. (SERV) have plummeted 55.2% year-to-date, significantly underperforming the Zacks Computers – IT Services industry and the broader S&P 500 Index. The decline is largely due to investor concerns regarding the company’s revised 2026 revenue guidance, which has been slashed from $26 million to $9-$10 million, after second-quarter revenues of $3.2 million fell below expectations despite a year-over-year increase of over 400%.
In the second quarter, Serve Robotics reported a gross loss of approximately $8.8 million, leading to a negative gross margin of 271%. With non-GAAP operating expenses at approximately $40.4 million, the company is tightening its spending, lowering its 2026 capital expenditure forecast to $15-$17 million from $25 million. The outlook for its partnership with Uber has also become uncertain, with a notable drop in delivery volumes after 17 consecutive quarters of growth.
Serve Robotics currently operates around 2,000 robots across over 40 cities. The company is exploring new growth avenues in healthcare and other sectors, having secured seven multi-year contract extensions and added two new hospitals during the first half of 2026. Despite facing significant near-term challenges, including reduced revenue forecasts and a focus on improving overall profitability, the company aims to leverage advancements in technology and increased robot productivity to enhance long-term growth prospects.
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