Why Now is the Time to Buy PONY Stock Post a 29.5% Drop in a Month

Pony AI (PONY), an autonomous driving company, has seen its shares fall 29.5% in the last month, presenting a potential buying opportunity according to Zacks, despite outperforming with a 245% surge between mid-April and mid-May. The company is expanding its robotaxi fleet to over 1,000 vehicles by 2025 and has formed key partnerships with Toyota and Uber, while its local sourcing strategy helps mitigate tariff risks; the Wall Street average target price of $23.5 suggests an upside of over 85% from current levels.

Analysis

Pony AI (PONY) shares have experienced a significant 29.5% decline over the past 30 days, a sharp contrast to the Zacks Transportation - Equipment and Leasing industry’s 1.4% dip, but this follows a substantial surge of over 245% from mid-April to mid-May 2025. Despite this recent pullback, the company's fundamentals appear robust, with plans to expand its robotaxi fleet from around 250 vehicles late last year to over 1,000 by the end of 2025, with large-scale deployment expected to ramp up in the second half of the year. Key strategic partnerships underpin this growth, including a joint venture with Toyota Motor (TM) for mass-producing driverless robotaxis in China and a collaboration with Uber Technologies (UBER) to deploy robotaxis on Uber's platform, initially in a Middle Eastern market. Furthermore, a partnership with Shenzhen Xihu Corporation Limited aims to deploy over 1,000 seventh-generation robotaxis in Shenzhen. PONY's management has emphasized that its operations are largely insulated from tariff uncertainties due to a predominantly local supply chain and proactive measures to enhance supply chain resilience. The Chinese robotaxi market, valued at approximately $12 billion in 2024, offers a promising growth environment, supported by government initiatives. Currently priced at $12.65, PONY stock is 88.8% below its 52-week high, while the Wall Street average target price of $23.5 suggests a potential upside of over 85%.

Key Decisions for Investors

• Investors may view the recent 29.5% share price correction in PONY as a potential entry point, given the company's aggressive fleet expansion targets and strategic partnerships.
• Monitor the progress of PONY's robotaxi fleet deployment, particularly the ramp-up in the second half of 2025, and the execution of its partnerships with Toyota and Uber as key performance indicators.
• Consider PONY's local sourcing strategy, which mitigates tariff risks, and its strong positioning within the rapidly growing Chinese autonomous vehicle market when assessing long-term growth prospects, balanced against the inherent volatility of emerging technology stocks.