Why SES AI Stock Is Up 11% Today

SES AI (SES) the stock was up 11.3% by 10 a.m. ET Tuesday morning after the battery research and development shop announced plans to use artificial intelligence (AI) to develop better rechargeable batteries for electric cars.

It didn’t hurt either when SES AI announced its partners in the project: heavy AI Nvidia and Super Micro Computer.

What SES AI said

Valued at $405 million, the tiny SES AI still bills itself as “a global leader in the development and production of high-performance Li-Metal batteries.” And in an effort to grow into that title, the company today announced a “groundbreaking initiative to accelerate material discovery in electric transport…by mapping the universe of small molecules using a state-of-the-art supercomputer optimized for artificial intelligence.”

SES says it will use its “Crusoe Cloud” AI platform, powered by NVIDIA HGX H100 GPU clusters and running on Supermicro servers, to generate a comprehensive database of small molecules useful in building lithium batteries. It will then build a multimodal large language model (LLM) to suggest molecule structures to try — and see if it can build a better battery.

Is SES AI stock a buy?

So far, so good. Sounds like a good use of AI to me. Still, until something comes out of all this research, investors should consider SES AI a speculative stock — and exercise caution accordingly.

Don’t get me wrong. The company has prospects. Valued at $405 million, SES AI has less than $12 million in debt and $295 million in cash. Literally $0.70 of every dollar of the company’s market cap is backed by cash right now.

On the other hand, SES AI is burning through cash at a rate of over $70 million per year. And with no revenue (much less profit), it will likely continue to burn cash for some time. Most analysts don’t see SES AI becoming profitable until 2031 at the earliest.

If you decide to invest in it, be prepared for a very long wait.