Investment Review №338. Change in Direction

Serve Robotics Inc. (SERV) a pioneer in autonomous last-mile delivery, deploying compact sidewalk robots to move food and small parcels directly to consumers’ doors. Revenue is split across Fleet Services (robot operations and management) and Software Services. The key catalyst is aggressive fleet expansion. In 3Q25, revenue surged ~210% YoY to ~$0.7m, driven by higher robot utilization and network density—early evidence of operating leverage embedded in the platform. Strategic integrations with Uber Eats and DoorDash—which collectively dominate U.S. food delivery—materially expand SERV’s addressable order flow. As deployment scales, the Robot-as-a-Service (RaaS) model underpins recurring revenue visibility. According to Freedom Broker analysts, the stock’s 12-month fair value stands at $16.

Nebius Group N.V. (NBIS) is a vertically integrated cloud platform purpose-built for AI workloads, delivering scalable, high-performance GPU infrastructure. By owning its data centers and structurally bypassing hyperscaler markups, NBIS offers cost-efficient compute optimized for AI-native enterprises. The company’s differentiated positioning lies in deep stack integration, flexible GPU access, and expanding footprint across key global availability zones—positioning NBIS as a next-generation infrastructure provider in the AI cloud buildout cycle. Ongoing investment in AI-focused products and capacity expansion supports exposure to a large and rapidly expanding addressable market. With strong revenue momentum and meaningful operating leverage embedded in the model, Nebius is positioned for multi-year growth acceleration within our investment horizon. According to Freedom Broker analysts, the stock’s 12-month fair value stands at $108.

VAALCO Energy, Inc. (EGY) is a Houston-based independent E&P company focused on the acquisition, development, and production of crude oil, natural gas, and NGLs. The portfolio is anchored in Africa—with producing assets in Gabon, Egypt, Côte d’Ivoire, and Equatorial Guinea—complemented by Canadian production. While revenue remains predominantly oil-driven, geographic and asset diversification mitigates single-field concentration risk and enhances cash flow resilience across commodity cycles. The investment case centers on a potential oil price recovery into 1Q26, combined with a step-up in production following the restart of operations in Côte d’Ivoire. Importantly, VAALCO maintains a defined shareholder return framework anchored by regular quarterly dividends. At ~6.0% annualized yield, the stock offers an attractive income profile. According to Freedom Broker analysts, the stock’s 12-month fair value stands at $7.3.

International Bancshares Corporation (IBOC) is a multi-bank financial holding company providing commercial and retail banking services primarily across Texas, with additional operations in Oklahoma. The franchise operates under a traditional balance sheet–driven model, with core deposits serving as the primary funding base for earning assets. The investment case is underpinned by a combination of strong operating efficiency—with a 12-month ROA of ~2.6% and ROE of ~14.3%, supported by an exceptionally low efficiency ratio of ~37%—structurally solid profitability, and a robust capital position (CET1 ratio >23%). While IBOC’s profile includes elevated commercial real estate concentration, interest rate sensitivity, and cross-border exposure, these risks are offset by high earnings capacity and a conservative balance sheet. Loan growth remains closely tied to the Texas economy, where long-term nominal growth is expected to outpace the U.S. average. According to Freedom Broker analysts, the stock’s 12-month fair value stands at $85.