Pony AI (PONY 32.05%) stock posted explosive gains this week. The share price of the Chinese autonomous vehicle technologies company ended the stretch up 42.7% compared to its level at the previous week’s close, according to data from S&P Global Market Intelligence.
Pony AI’s valuation rocketed higher this week after it was announced that the company had launched its robotaxi services in Guangzhou, China. The company’s share price is now up 64.5% from market close on the day of its November initial public offering (IPO).
Pony AI stock soars as robotaxi operations launch in Guangzhou
Pony published a press release on Friday announcing it had commenced robotaxi operations in Guangzhou, kicking off a powerful rally for its stock. The company noted it was the first and only company to have approval for robotaxi operations connecting Guangzhou’s city center to Guangzhou Baiyun International Airport and Guangzhou South Railway Station. The rollout follows the service’s debut in Beijing, where the company offers commercial robotaxis connecting riders to Daxing International Airport and Beijing South Railway Station.
What’s next for Pony AI
In addition to its robotaxi services, Pony AI is working on self-driving trucking fleets. In January, it became the first company to get approval for robotruck fleet testing on highways connecting major Chinese provinces. As part of the tests, the truck at the front of the caravan had a human safety operator and was followed by a fleet of autonomous vehicles.
Following this week’s big share-price gains, Pony AI now has a market capitalization of roughly $8.3 billion and is valued at approximately 91 times this year’s expected sales. While the company’s highly growth-dependent valuation could set the stage for the stock to see volatile trading, the autonomous vehicle specialist has been racking up some encouraging wins.
With Pony AI winning key approvals from Chinese regulators, the country’s government seems to be positioning the company as one of its key partners in autonomous vehicles. If that continues to be the case, the stock could have massive long-term upside.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.