Shares of Pony AI (PONY 9.21%), which aims to use artificial intelligence to direct driverless vehicles for robotaxi services in China and elsewhere, soared as much as 12% in early trading Monday before retreating a bit in the afternoon — all on no obvious news.

As of 12:10 p.m. ET, Pony AI stock is still up a solid 10%.

Image source: Getty Images.

Introducing Pony AI

Pony bills itself as “a global leader in achieving large-scale commercialization of autonomous mobility” — but “leader” seems like a relative term.

Despite sporting a market capitalization well in excess of $5 billion, Pony did less than $86 million in revenue over the past year…and lost nearly $320 million in the process. What’s more — and strangely for a growth stock — the rate at which Pony’s revenues are growing resembles less a gallop and more a slow trot. After surging briefly in 2022, this start-up‘s sales have grown just 25% over the last two and a half years, a growth rate of less than 10% per year.

Losses, on the other hand, have more than doubled over the same period.

Is Pony AI stock a buy?

About 10 days ago, Pony issued a press release that suggests things could soon improve. The company says it’s partnering with Qatar’s largest transportation service provider, Karwa, to roll out a robotaxi service in that country. Apparently it has already begun testing robotaxis on public roads in Doha, the capital of Qatar.

Pony calls this a “significant milestone” — and it may turn out to be. But time is running short for Pony. With $600 million in the bank and a cash burn rate of $140 million per year, Pony has about four years to prove it can earn a profit. Until that happens, Pony stock remains a sell for me.