Pony AI Inc (NASDAQ: PONY) shares plummeted 6.45% in pre-market trading on Tuesday, despite reporting strong revenue growth for the second quarter of 2025. The autonomous driving technology developer's stock decline suggests investors may be concerned about the company's path to profitability and the sustainability of its growth trajectory.

For Q2 2025, Pony AI reported total revenues of $21.5 million, a significant 75.9% increase year-over-year. The company's Robotaxi services revenue surged 157.8% to $1.5 million, driven by expanding user adoption and growing demand in tier-one cities. However, Robotruck services revenue declined 9.9% to $9.5 million as the company optimized operations to focus on high-margin revenues.

Despite the revenue growth and narrowing losses, with Q2 non-GAAP loss per share improving to $0.13 from $0.91 a year earlier, investors appear to be taking a cautious stance. The stock's sharp decline may reflect concerns about the company's cash burn rate, competitive pressures in the autonomous driving sector, and the broader economic challenges facing tech companies. While Pony AI has made progress in Robotaxi production, with over 200 Gen-7 vehicles produced in the last two months and plans to scale up to a 1,000-vehicle fleet by year-end, the market seems to be demanding clearer signs of a path to profitability before rewarding the stock.