Jefferies initiated coverage of Pony AI with a Buy rating, citing improving unit economics and faster fleet expansion in China. The brokerage highlighted the company's preliminary 2025 results showing net losses narrowing to $126 million-$143 million from $275 million a year earlier. Fourth-quarter profits of $14 million-$31 million were boosted by fair value gains from Moore Threads shares.

Jefferies expects stronger profitability in 2026 as operating performance improves across key markets. Guangzhou maintained profitability despite expansion into new areas, while Shenzhen emerged as the fastest-growing market with rising revenue per vehicle. The brokerage noted that policy support, including a new interoperability framework in Guangdong, expands Pony AI's addressable market in the Greater Bay Area.

The firm raised its revenue forecasts to $114 million for 2026 and $238 million for 2027, with growing share from robotaxi services. Pony AI's asset-light model improves revenue visibility through partnerships, including Shenzhen's first citywide permit for fully driverless operations with plans to deploy over 1,000 vehicles. Overseas expansion continues across eight markets, though China remains the strategic priority.

Quick Fact: Pony AI's net losses narrowed to $126 million-$143 million in 2025 from $275 million in 2024.