Shares of Serve Robotics Inc. (SERV) popped in Wednesday's premarket trading. The autonomous delivery company just reported fourth-quarter results that beat Wall Street's estimates and, more importantly, raised its revenue outlook for fiscal 2026. When a company that's supposed to be losing money loses less money than expected and says it will make more money later, the market tends to like that.

The rally probably got an extra kick from the fact that a lot of people were betting against the stock. With 25% of the public float sold short, there was substantial bearish positioning that may have fueled a short squeeze as the good news rolled in. It's the classic market drama: bulls versus bears, with earnings reports as the battleground.

The Numbers That Mattered

So, what did Serve actually report? For the fourth quarter, the company posted an adjusted loss of 34 cents per share. That's not a profit, but it's a lot better than the 53-cent loss analysts were expecting. Sales came in at $882 thousand, beating the consensus estimate of $762.5 thousand.

More impressively, those Q4 sales were up roughly 400% compared to the fourth quarter of 2024. For the full year 2025, revenue hit $2.7 million, which was above the company's prior guidance of $2.5 million. The real headline grabber, though, was the guidance boost. Serve raised its fiscal 2026 sales target from $25 million to $26 million. That's a big jump from where they are now, and it's the kind of forward-looking promise that gets investors excited.

Robots on the Move

The operational metrics tell a story of growth, too. The average number of robots making daily deliveries was 547, up dramatically from just 57 a year ago. Daily "supply hours"—essentially how much time robots are out working—jumped from 455 to 6,676. That's a lot more robots doing a lot more work.

But it's not all smooth rolling on the sidewalk. Last week, a short-seller publication called The Bear Cave published a report raising concerns. The argument was that Serve's expectations for a sharp revenue increase in 2026 could run into real-world problems: community resistance to robots, performance issues in traffic, and restaurants that have either dropped Serve or haven't expanded beyond early pilot programs. It's a reminder that scaling a robotics delivery network involves more than just building more robots.

In January, Serve took a step to diversify its business by signing a deal to acquire Diligent Robotics. This expands its autonomy platform beyond sidewalk delivery into indoor environments, with hospitals pegged as a key initial market. It's a strategic move to not have all its eggs in the food delivery basket.

Sliders Delivered by Robot

Adding to the momentum, Serve announced a new collaboration on Wednesday with White Castle. The plan is to launch autonomous delivery services via Uber Technologies Inc.'s (UBER) Uber Eats platform. This is a significant step for Serve's operational strategy, aiming to make food delivery more efficient by leveraging its AI-powered robotics.

The partnership is expected to roll out in select markets, serving as a live showcase for how autonomous delivery could work in urban areas. Serve's latest third-generation robots are built to handle sizable, temperature-sensitive orders—exactly the kind of thing you'd get from a fast-food chain.

The Short Side of the Story

Now, back to those bears. The company has 17.88 million shares sold short, which represents 25.0% of its 71.523 million share public float. That's a very high level of short interest. It means a lot of investors are explicitly betting that the stock will go down. When positive news hits and the stock starts rising, those short sellers can be forced to buy back shares to cover their positions, which can push the price up even further—a classic short squeeze.

Charts and Ratings

From a technical perspective, the stock is sending mixed signals. It's currently trading 13.1% above its 20-day simple moving average, showing some short-term strength. But it's still 3.9% below its 100-day average, indicating longer-term resistance. Over the past 12 months, shares are up 38.74% and are trading closer to their 52-week highs than lows.

The Relative Strength Index (RSI) sits at 45.14, which is neutral territory—the stock isn't overbought or oversold. Meanwhile, the MACD indicator shows a value of -0.3880, with the signal line at -0.4548. Because the MACD is above the signal line, this is interpreted as a bullish crossover. So you have neutral momentum from the RSI but a bullish signal from the MACD. Traders often watch key levels, with $12.50 noted as resistance and $9.00 as support.

Analysts, on average, are bullish. The stock carries a Buy rating with an average price target of $32.06. Recent actions include Northland Capital Markets maintaining an Outperform rating and a $26 target, Freedom Capital Markets initiating coverage with a Buy rating and a $16 target, and Oppenheimer initiating with an Outperform rating and a $20 target.

For ETF investors, Serve Robotics has exposure in the Inspire Small/Mid Cap ETF (ISMD), with a 0.26% weight.

When the market opened, the numbers were moving. According to market data, Serve Robotics shares were up 8.79% at $10.52 during Wednesday's premarket trading. It was a good day for the robots, and for the investors betting on them.