BofA Securities reiterates Buy rating on Pony AI stock with $21 price target

Investing.com - BofA Securities has reiterated its Buy rating and $21.00 price target on Pony AI Inc (NASDAQ:PONY) following the company’s recent partnership developments in Dubai. According to InvestingPro data, analyst targets for PONY range from $15.24 to $26.00, with the stock currently trading at $12.86.

Pony AI, with a market capitalization of $4.57 billion, announced on May 27 that it had entered into a Memorandum of Understanding (MoU) with Dubai’s Roads and Transport Authority (RTA) to deploy its advanced robotaxi fleet in the region. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 15.86, though its overall financial health score remains weak.

On Monday, the company revealed that both parties held a robotaxi unveiling ceremony in Dubai, formalizing their partnership to advance Level 4 (L4) autonomous mobility solutions.

The partnership aligns with Dubai’s 2030 Smart City Vision, which aims to transform 25% of all journeys in Dubai into autonomous trips by 2030.

According to BofA Securities, the collaboration will introduce Pony’s autonomous driving technology through a multi-phase rollout, with initial supervised trials set to launch in 2025, followed by fully driverless operations in 2026.

In other recent news, Pony AI reported first-quarter revenues for 2025 at $14 million, a 12% increase year-over-year, despite a 61% decline from the previous quarter. The company also announced an operating loss of $56 million, which marks an improvement from the $173 million loss in the fourth quarter of 2024. Goldman Sachs has raised its price target for Pony AI to $26, maintaining a Buy rating, citing the company’s expansion in the robotaxi sector and its focus on recurring revenue. Additionally, Pony AI’s co-founders have extended their share lock-up period by 540 days, covering a significant portion of the company’s ordinary shares. This move is intended to demonstrate confidence in the company’s growth strategy.

Pony AI has also made strides in reducing production costs for its robotaxis, with analysts from Nomura noting a decrease in bill-of-materials costs to approximately $41,165. The company unveiled a new lineup of robotaxis at the Shanghai Auto Show, developed with partners like Toyota (NYSE:TM), BAIC Motor, and Guangzhou Automobile Group. Furthermore, Pony AI announced a strategic partnership with Tencent (HK:0700) Cloud to enhance its autonomous driving technology and expand its robotaxi services. This collaboration aims to integrate Pony AI’s services with Tencent’s ecosystem, including Weixin and Tencent Maps, to reach a broader customer base.

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