Why Serve Robotics Stock Skyrocketed 18.2% Today

Shares of Serve Robotics (NASDAQ: SERV) jumped on Wednesday, finishing the day up 18.2%. The spike came as the S&P 500 gained 0.3% and the Nasdaq Composite rose 0.1%.

A report from Politico revealed today that the Trump administration considers the robotics industry a critical part of its push to develop domestic manufacturing.

The Trump admin is all in

The report, citing two insiders, claims that the administration is looking to issue a major executive order on robotics in the coming year. Similar orders in the past, like those for artificial intelligence and critical minerals, helped spur major rallies for some companies.

Commerce Secretary Howard Lutnick has been meeting with industry leaders and is reportedly "all in" on advancing the technology. A Commerce spokesperson told Politico the administration is "committed to robotics and advanced manufacturing," believing them to be a central part of its plan to revitalize American manufacturing.

Serve is risky

Investors seem to be hoping that the administration will take direct stakes in individual robotics companies as it has in companies from other industries. While it is certainly possible that this happens, it would be surprising if Serve Robotics were singled out. I think today's bump will fade.

The company has limited revenue and is burning cash rapidly. It is funding operations with stock sales, diluting shareholders. I would avoid the stock.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Serve Robotics. The Motley Fool has a disclosure policy.