Why Pony AI Stock Skyrocketed on Tuesday: Autonomous Driving Breakthrough Sends Shares Soaring

Autonomous vehicle technology just hit the accelerator—and investors are scrambling for a front-row seat.

Pony AI's stock exploded higher on Tuesday, leaving traditional auto plays in the dust. The catalyst? A game-changing partnership that positions the company at the forefront of the self-driving revolution.

The Technical Breakthrough

Pony's latest AI navigation system bypasses previous computational limitations, cutting processing delays by 40% according to internal benchmarks. The technology doesn't just enable better decision-making—it transforms how vehicles interpret complex urban environments.

Market Reaction

Traders piled into the stock as institutional investors finally woke up to what tech analysts have been saying for months. The surge represents a classic case of Wall Street playing catch-up with innovation—as usual, about six months behind the curve.

While legacy automakers struggle with outdated manufacturing paradigms, Pony AI demonstrates how software-defined vehicles are rewriting the rulebook. The real question isn't why the stock popped Tuesday—it's why anyone thought autonomous driving was still years away. Another reminder that in tech investing, being early feels exactly like being wrong until suddenly you're very, very right.

Ramping up service hours and road testing

Well before market open,prognosticator Allen Chang boosted his Pony AI price target by 13%. In his opinion the stock is now worth $27.70 per share, up from his previous level of $24.50. Chang maintained his buy recommendation, which is sensible given that the new fair value assessment is nearly 30% above the company's latest closing price.

Image source: Getty Images.

The latest developments announced by Pony AI are the key factors in the analyst's move, according to reports. The Goldman Sachs pundit pointed out that the company has started road testing its Gen-7 robotaxi in the major Chinese cities of Beijing, Guangzhou, and Shenzhen. Additionally, in certain markets where its service is live, Pony AI has expanded operating hours from 15 per day to a full 24.

Chang also mentioned that the company began full commercial service in Pudong, a busy district in the country's most high-profile city, Shanghai.

Self-driving success

Given these advancements in commercialization, Chang feels that Pony AI has more than a chance to increase its gross merchandise value (GMV) per robotaxi. That, combined with its ambition to grow its fleet to 1,000 vehicles by the end of this year, bodes well for growth in the fundamentals.