Shares of SES AI (SES 2.21%) have exploded in recent weeks, logging 53.2% gains in September and another 62.3% in October, according to data provided by S&P Global Market Intelligence. The stock is up a whopping 148% in just five weeks.
If you've already guessed from its name, SES AI does something related to artificial intelligence (AI). However, what it does is probably something you've never heard of before.
SES AI uses AI to "discover" electrolyte materials to build lithium-metal and lithium-ion batteries that can be used in electric vehicles (EVs), drones, urban air mobility, battery energy storages system, and robotics.
SES AI stock went ballistic in recent weeks after an acquisition and the launch of a new product. Or, investors are perhaps speculating SES AI to be one of the candidates on President Donald Trump's list for a potential strategic investment by the U.S. government.
Here's all you need to know.
Image source: Getty Images.
SES AI stock is betting big on data centers
In mid-September, SES AI acquired Shenzen UZ Energy, a China-based provider of energy storage systems (ESS) hardware and software solutions for $25.5 million. Given UZ Energy's presence in North America, China, Japan, Europe, and Australia, SES AI expects the acquisition to help it expand market share in the $300 billion global ESS market. The U.S., in particular, could be a key growth market amid booming demand for electricity from AI data centers.
The UZ Energy acquisition, however, was already announced in July. So I suspect SES AI stock is riding the Trump-driven mania. The U.S. government's aggressive push to acquire stakes in several critical minerals companies in recent weeks has sent shares across the board surging. Examples include lithium miner Lithium Americas, rare earth company MP Materials, and Canadian metals explorer Trilogy Metals. SES AI stock is also catching the wave.
Is it time to buy SES AI stock hand over fist?
SES AI may never be a Trump target because although the company is headquartered in the U.S. and conducts part of its research and development here, its primary operations are in Singapore, Shanghai, and Seoul.
From a business standpoint, though, SES AI is making significant progress.
It generated its first revenue of $2 million last year, projects its revenue to jump to $15 million to $25 million in 2025, and posted a gross margin of 74% in its last quarter. SES AI also has no debt.
In April, SES AI launched an AI-powered battery material discovery software called Molecular Universe, with over 30 companies already testing it.
SES AI is using Nvidia's graphic processing units and AI technology, Crusoe's cloud platform, and Super Micro Computer's computing solutions to build and expand the molecular database. It is all set to unveil the latest version, Molecular Universe 1.0 (MU-1), on Oct. 20, which covers a wider range of solid and liquid battery electrolytes and could help SES AI break into new markets such as specialty chemicals, oil and gas, and personal care. That, and the company's primary goal to sell the software through subscriptions for recurring revenue makes it an interesting growth stock to keep an eye on.
