Newsmax (NMAX 0.18%), the conservative media company that promotes itself as an alternative to Fox (FOX 1.15%) News and other mainstream media outlets, went public at $10 on March 31. The following day, its shares closed at a record high of $233 a share.
That dizzying gain was driven by its association with President Donald Trump, who frequently praised the network while mocking Fox News; its decision to offer just 6% of its shares in its IPO; and the same meme stock dynamics that temporarily lifted many other Trump-related stocks.
Image source: Getty Images.
Yet Newsmax has some obvious flaws. Its cable, satellite, and digital channels reach about 40 million Americans. But it's been criticized for spreading conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.S. Capitol, and COVID-19 vaccines. Its claims about the election also triggered big defamation lawsuits from voting machine companies Smartmatic and Dominion. It reached a $40 million settlement with Smartmatic last year, but the Dominion lawsuit remains unresolved.
In 2024, Newsmax's revenue rose 27% to $171 million as it gained more viewers in the months leading up to the elections, but its net loss widened from $42 million to $72 million. That steep loss was caused by the expansion of its platform to support its rising viewership numbers, and its legal costs related to the Smartmatic settlement. That pressure will likely worsen if Dominion wins its case. That's why Newsmax stock now trades at about $14, with a market cap of $1.3 billion.
But even after that 94% plunge, it still isn't a bargain because it trades at 7.5 times last year's sales. So instead of sticking with Newsmax, it might be smarter to invest in a smaller tech stock that might grow faster and eclipse Newsmax's market cap within the next 12 months. I believe the autonomous delivery robot maker Serve Robotics (SERV 2.37%) fits the bill.
Why does Serve Robotics have a brighter future than Newsmax?
Serve Robotics was spun off from Uber Technologies in 2021. Its newest Gen 3 delivery robots can travel up to 11 mph, last up to 48 miles on a single charge, and can carry up to 15 gallons of cargo. They're also resistant to extreme weather conditions. Its top customer is still Uber Eats, and it only operates its robots in the Los Angeles and Dallas areas.
The company has deployed 350 delivery robots so far, including its initial fleet of 100 robots in the L.A. area, followed by another 250 robots in the L.A. and Dallas markets. However, only 73 of those robots were running active routes during the first quarter of 2025.
In 2024, Serve generated less than $2 million in revenue, with a net loss of $39 million. Those numbers might seem minuscule compared to its market cap of $604 million. But by the end of 2025, it aims to deploy another 2,000 delivery robots for Uber Eats. Over the following two years, it expects to deploy even more robots, expand to more cities (starting with Atlanta this year), and gain more customers.
If Serve achieves that ambitious expansion plan, analysts expect its revenue to surge to $84 million with a net loss of $44 million in 2027. Based on that outlook, it looks a bit more reasonably valued at 7 times its 2027 sales. According to Markets and Markets, the global delivery robots market could still grow at a compound annual growth rate of 32.4% from 2025 to 2030 as more businesses automate their delivery services and curb their dependence on human couriers.
Assuming Serve matches analysts' expectations and trades at a more generous 20 times its forward sales, its market cap could swell to $1.7 billion over the next 12 months and easily eclipse Newsmax's current valuation. Meanwhile, Newsmax's valuation could shrink significantly if it loses the Dominion lawsuit or gets hit with additional lawsuits. So while Serve Robotics remains a speculative investment, it might have a brighter future than the wildest Trump-driven meme stock of the year.
