10 Best Small Cap AI Stocks to Buy According to Short Sellers

7. Serve Robotics Inc. (NASDAQ:SERV)

Market Cap as of August 26: $403.52 million

Number of Hedge Fund Holders: 3

Short % of Shares Outstanding as of July 31: 11.63%

Serve Robotics Inc. (NASDAQ:SERV) designs, develops, and operates zero-emission autonomous robots that serve people in sectors like food delivery. The self-driving robots are equipped with sophisticated sensors and AI algorithms and aim to revolutionize the last-mile delivery industry through a sustainable and efficient solution for transportation.

In the second quarter of 2024, Serve Robotics Inc. (NASDAQ:SERV) made a revenue of $0.47 million, ahead of Street expectations by $68,380. The loss per share was $0.27. $0.30 million of the revenue came from the software services segment from the Magna agreement, which is a contract between Serve Robotics Inc. (NASDAQ:SERV) and Magna International to help scale up production and reduce costs.

It completed a public equity offering earlier this year, raising $40 million and listing its common stock on NASDAQ. A follow-up private placement transaction generated an additional $15.0 million.

It ramped up production of its 2,000-robot fleet, led by newly appointed Chief Hardware and Manufacturing Officer, Euan Abraham. Strategic partnerships, like the one mentioned with Magna, and Ouster will streamline manufacturing greatly. The company increased its daily supply hours by 106% year-over-year in Q2, with the number of daily active robots increasing by 85% year-over-year.

Serve Robotics Inc. (NASDAQ:SERV) expanded its delivery operations into Koreatown, and Los Angeles, and partnered with Uber Eats to bring on new local merchants. This expansion showcases the company’s broader geographic growth strategy, which is necessary for it to achieve its full growth potential. This is why it is one of the top small-cap AI stocks to buy according to short sellers. It is currently held by 3 hedge funds.