Shares of the Chinese autonomous-driving company Pony AI (NASDAQ: PONY) were falling this morning. The decline came after reports that TuSimple, a maker of self-driving trucks, sent sensitive autonomous-vehicle data to China even as it promised the U.S. government not to disclose information based on national security concerns, according to The Wall Street Journal.

Pony AI isn't part of the controversy, but the U.S. and China aren't exactly on the best of terms right now amid tariff concerns and geopolitical positioning. The reports about TuSimple are likely worrying some investors that the U.S. could take a more restrictive approach on how autonomous-vehicle data is collected by Chinese companies.

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Pony AI's stock was down by 13.8% as of 11:16 a.m. ET Wednesday.

A Pony AI self-driving vehicle. Image source: Pony AI.

Tensions are high between the U.S. and China

The U.S. is increasingly focused on protecting data and technology created here from being exported to Chinese companies and the Chinese government. That's led to restrictions on what types of semiconductors can be sold to China and protections against American social media data being exported to China.

That's why the Journal's report that TuSimple shared self-driving trade secrets with China could be affecting Pony AI's stock today.

Pony AI has permits to operate its autonomous vehicles in several states, and investors may be worried that TuSimple's supposed actions may reflect poorly on the company and potentially lead to increased government scrutiny.

Another factor that could be affecting the company's stock price today is that Chinese electric-vehicle (EV) companies are slashing prices. For example, BYD is one of the leading EV companies in China, and it just cut its vehicle prices by up to 34% for some models. Pony AI works with several Chinese EV companies, and investors may be concerned that a slowdown in the EV industry there could hurt its business.

Potentially more volatility ahead

With Chinese EVs facing headwinds, tariff uncertainty between the U.S. and China, and now concerns over autonomous-vehicle data, there are plenty of variables that could cause Pony AI's stock to remain volatile right now.

That doesn't mean it isn't a good long-term buy, but investors should be aware that the global automotive industry is facing significant pressures right now, and that's spilling over to companies connected to the industry, including those in self-driving tech.

Should you invest $1,000 in Pony Ai right now?

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Shares of Pony.ai (NASDAQ: PONY) are flying higher on Monday. The company's stock rose 40.2% as of 12:16 p.m. ET today. The move comes as the S&P 500 lost 0.8% and the Nasdaq Composite lost 1.3%.

A key big-tech partnership

The company, which develops self-driving technologies, announced a new partnership with Tencent Holdings, a large Chinese tech company headquartered in Shenzhen. Pony.ai will integrate its autonomous robotaxi services into Tencent's Weixin Mobility Services platform and Tencent Maps.

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A boost for the company's profile

The deal validates the company's technology, demonstrating its usefulness to a company as powerful as Tencent. The collaboration will likely help Pony.ai gain more clients and drive revenue growth. It also benefits from exposure to Tencent's tech ecosystem, whose advanced cloud computing, big data, and artificial intelligence muscle will enhance Pony.ai's platform and help refine its models.

The business is currently bleeding cash and has fairly meager revenue. Last quarter, it lost roughly $180 million on $35 million in sales.

These numbers look concerning, but they're not unusual for a relatively young company still proving its technology. It is well funded and has a strong balance sheet with nearly $750 million in cash on hand.

The new partnership will undoubtedly help it move toward profitability. For those with patience and a higher risk tolerance, I think Pony.ai could pay off.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tencent. The Motley Fool has a disclosure policy.

Pony AI (NASDAQ: PONY) stock just keeps on galloping. For the third day in a row, the small-cap Chinese robotaxi and robotruck company rode higher on Friday, building on huge gains Wednesday and Thursday. The stock tacked on another 22.7% through 9:40 a.m. this morning and now is up more than 120% over the past three days.

Yes, you read that right: Pony doubled, and then went up even more.

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Image source: Getty Images.

Pony express delivers good news

So far this week, the biggest little Chinese small cap you've never heard of (before this week) has announced it's producing three new robotaxi models in cooperation with Beijing Automotive Group, Guangzhou Automobile Group, and Toyota Motor (NYSE: TM), respectively, and that it has lined up local partner Hesai Group (NASDAQ: HSAI) to supply it with AT128 lidar sensors for its robotaxis.

Today, Pony added that it's partnering with another local company, Tencent Holdings (OTC: TCEHY), to further "advance autonomous driving technology and robotaxi commercial deployment."

This tie-up will pair Pony's "cutting-edge" autonomous driving system with tech products from Tencent, specifically the latter's Weixin (or "WeChat") social media, messaging, and payment app, Tencent Maps, and its "robust cloud computing, big data and AI infrastructure," all of which sound to me like logical add-ons to an electric-car-slash-robotaxi service.

Is Pony AI stock a buy?

Tencent might do well to ante up a bit of cash. Tencent's tech contributions are all great, but there's no mention of financial support in the press release, and Pony is still burning cash, and losing $274 million a year.

While the company has considerable cash reserves, a little more could go a long way to ensuring Pony stock doesn't go bankrupt before 2029, the first year it's expected to be profitable, according to analysts polled by S&P Global Market Intelligence. Meanwhile, until the financial picture firms up, I must still consider Pony a speculative, momentum-driven stock.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tencent. The Motley Fool has a disclosure policy.

Shares of Pony AI (NASDAQ: PONY) charged sharply higher on Wednesday, surging as much as 36.8%. As of 11:53 a.m. ET, the stock was still up 26%. The catalyst that propelled the Chinese autonomous mobility specialist higher was news of the company's next-generation robotaxi platform and ambitious plans for mass production.

Just months away

At the Shanghai Auto Show, Pony AI introduced the seventh generation of its robotaxi platform. The company's automotive-grade driving kit (ADK) features a number of enhancements that could bode well for the future.

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Pony AI revealed that a number of "design optimizations" reduced the total components cost by 70% compared to its previous generation. Furthermore, this resulted in an 80% decrease in the autonomous driving computations necessary, while also resulting in a 68% reduction in solid state light detection and ranging (LiDAR). Pony AI also announced plans to begin mass production by mid-2025.

The company unveiled three new robotaxi models that were developed in partnerships with major automakers -- Toyota, Beijing Automotive Group, and Guangzhou Automobile Group. The announcement comes just weeks after the company was granted a robotaxi testing permit in Luxembourg and expanded its fully driverless commercial robotaxi service in Shenzhen, China.

This steady string of positive announcements has fueled enthusiasm, but investors would be well-advised to step back and look at the big picture. It's been less than six months since Pony AI went public, and its results help tell the tale. Its fourth quarter revenue of $35 million slumped 30% year over year, resulting in a net loss of $181 million, which increased eightfold. Furthermore, the stock is selling for more than 12 times sales, a high valuation for a company that isn't yet profitable.

Even after today's significant move higher Pony AI stock is still down 55% since its initial public offering in November, and 77% off its peak in February. While the stock represents an intriguing opportunity, investors would do well to keep the risks in mind and size their position accordingly.

Should you invest $1,000 in Pony Ai right now?

Before you buy stock in Pony Ai, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pony Ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

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Danny Vena has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.