Shares of Serve Robotics Inc (SERV) are soaring 16.70% in intraday trading on Wednesday, following Wedbush Securities' initiation of coverage with an "Outperform" rating and a $15 price target. This target represents a significant upside potential of approximately 46% from Tuesday's closing price.

Wedbush analysts believe that Serve Robotics is "uniquely positioned to capitalize on the accelerating adoption of AI-driven last-mile delivery vehicles." The company, which uses Level 4 autonomous robots for city street and sidewalk navigation, plans to expand its fleet to 2,000 robots by the end of 2025 and launch operations in new cities with favorable regulations.

Investors are responding positively to Serve Robotics' potential in the growing automated delivery market. The company aims to reduce delivery costs significantly, targeting $1 per delivery over time compared to the $8 to $10 typically charged by traditional couriers. This cost advantage, combined with strategic partnerships and proprietary technology, is expected to help Serve Robotics gain market share in the competitive delivery landscape. The stock's surge also comes amid a broader rally in robotics stocks, with several other companies in the sector seeing notable gains.