By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel is divided on SES AI's pivot to drone and energy storage systems. While some see it as a necessary survival move, others argue it's a data-gathering exercise that could create a competitive advantage through the 'Avatar' AI platform. However, there's consensus that the company's current revenue is negligible, and its path to profitability remains uncertain.
Risk: The company's ability to monetize its AI platform and improve unit economics as it scales production.
Opportunity: The potential to create a data moat and generate licensing revenue through the 'Avatar' AI platform.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
SES AI Corporation (NYSE:SES) is one of the best emerging technology stocks to invest in now.
The latest emerging-tech story came on April 23, 2026, when SES AI Corporation (NYSE:SES) reported first-quarter results showing early progress in its shift from long-cycle EV battery development toward near-term revenue from energy storage systems, drone batteries, and AI-enabled battery materials. Revenue reached $6.7 million, up 47% from $4.6 million in the fourth quarter of 2025, while gross margin improved to 18.1% from 11.3%. The company also reduced its GAAP net loss to $12.1 million from $17.0 million in the prior quarter and ended Q1 with about $178 million in liquidity.
Photo by Kumpan Electric on Unsplash
The update gives SES a more concrete commercialization angle within advanced batteries. During the quarter, SES entered a $20 million multiyear distribution agreement with ATG EPower for energy storage systems and completed the conversion of its Chungju, South Korea, manufacturing line from EV pouch cells to drone-format pouch cells, with capacity ramping toward one million cells annually. SES also reaffirmed full-year 2026 revenue guidance of $30 million to $35 million.
SES AI Corporation (NYSE:SES) develops AI-enhanced lithium-metal and lithium-ion batteries, energy storage systems, drone batteries, and AI-driven battery-material discovery technology.
While we acknowledge the potential of SES as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.** **
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Four leading AI models discuss this article
"The pivot to drone batteries is a tacit admission that SES failed to meet the rigorous performance and scale requirements of the automotive EV sector."
SES AI’s pivot from long-cycle EV development to drone and energy storage systems (ESS) is a necessary survival tactic, not necessarily a growth catalyst. While a 47% sequential revenue jump to $6.7 million is optically positive, the absolute numbers remain negligible for a company with a $178 million liquidity buffer and a $12.1 million quarterly loss. The real story is the conversion of the Chungju facility; it suggests they couldn't achieve the scale or performance required for automotive OEM adoption, forcing them into the lower-barrier drone market. Investors should view this as a 'de-risking' move that sacrifices the massive EV TAM (Total Addressable Market) for niche, lower-margin survival.
If the AI-driven battery material discovery platform yields a proprietary electrolyte or anode breakthrough, the pivot to drones could serve as a high-margin proof-of-concept that eventually forces automotive OEMs back to the table.
"SES's pivot to drones/ESS generates modest revenue but abandons the EV megatrend, trapping it as a niche player amid persistent losses and unproven lithium-metal tech."
SES's Q1 revenue rose 47% QoQ to $6.7M with gross margins expanding to 18.1% (from 11.3%), driven by a $20M ATG ESS distribution deal and Chungju line conversion to 1M drone cells/year—smart pivot from risky long-cycle EV batteries to nearer-term revenue. Reaffirmed $30-35M FY2026 guide implies ~3x Q1 run-rate if ramps succeed, with $178M liquidity providing ~3-4 quarter runway at current $12M loss burn. But scale remains trivial versus battery giants (e.g., CATL's $20B+ quarterly rev), lithium-metal tech unproven commercially (dendrite risks persist, limiting cycles), and EV delays signal execution woes. Article hypes 'commercialization' while omitting competitive moat concerns.
If SES nails the drone/ESS ramp and leverages AI materials for EV breakthroughs with partners like GM/Hyundai, it could re-rate as a multi-bagger undervalued gem. Cash hoard buys time for JVs to materialize without dilution.
"SES is executing a credible pivot to near-term revenue, but the scale remains microscopic and the shift away from EVs suggests the original thesis faced headwinds."
SES shows operational progress—47% QoQ revenue growth, margin expansion, reduced losses, $178M liquidity—but the numbers remain tiny. $6.7M quarterly revenue annualizes to ~$27M, barely inside their $30-35M 2026 guidance. The shift from EV to energy storage and drones is pragmatic but signals the core EV battery bet isn't near commercialization. ATG's $20M deal is real but represents distribution, not validation of underlying tech. The Chungju pivot to one million drone cells annually is meaningful capacity, but drone batteries are a far smaller TAM than automotive. Gross margin improvement is encouraging, but 18% on early-stage revenue is still thin.
If SES's lithium-metal tech doesn't outperform commodity lithium-ion in real-world drone and storage deployments, margin pressure returns fast. The company may be chasing lower-barrier niches precisely because automotive OEMs haven't adopted them—a sign the core tech isn't competitive, not just early.
"SES's tiny current revenue base and ongoing losses leave the stock vulnerable unless it delivers sustained profitability or meaningful diversification beyond one distributor and a single manufacturing line."
SES AI's Q1'26 results signal a pivot from long-cycle R&D to near-term revenue in energy storage and drone batteries, with revenue of $6.7M (up 47%), gross margin 18.1%, and liquidity of $178M. The company inked a $20M multiyear distribution with ATG EPower and converted its Chungju line to drone-format cells, aiming for ~1M cells/year. However, the top-line is still tiny relative to a GAAP loss ($12.1M in Q1) and a run-rate that implies only $30-35M revenue for 2026 if the trajectory persists. The risk is execution: customer concentration, unit economics, one-time deals, and capex burn to hit scale.
The ATG EPower deal and the drone-cell line conversion could establish a real, scalable revenue engine and onshoring tailwinds; if volumes materialize, margins may expand and the stock could re-rate sooner than skeptics expect.
"The drone pivot serves as a data-collection engine for their AI platform, potentially shifting the company's value proposition from hardware manufacturing to proprietary predictive software."
Grok and Claude are overlooking the 'AI' in SES AI. The pivot isn't just about battery chemistry; it’s about their 'Avatar' platform. If they use the drone market to train their AI models on real-world degradation data, they create a data moat that traditional battery manufacturers lack. This isn't just a pivot to lower-margin survival; it's a data-gathering exercise. If the AI platform proves predictive, the valuation re-rate won't come from battery sales, but from software licensing.
"SES's $178M liquidity provides ~15 quarters runway at current burn, far exceeding Grok's 3-4 quarter estimate."
Grok, your liquidity runway is off: $178M / $12.1M quarterly loss = ~14.7 quarters of burn coverage, not 3-4. This war chest—larger than annual revenue run-rate—buys SES multi-year optionality for drone ramps, AI data moats (per Gemini), or EV comebacks without dilution. Panel fixates on puny $6.7M rev; balance sheet is the unmentioned strength.
"Balance sheet runway doesn't solve the core problem: SES needs proof that drones/ESS margins scale faster than capex burn, or the cash hoard becomes a slow-motion value trap."
Grok's runway correction is valid, but it masks a deeper issue: $178M buys time, not inevitability. SES burns $12.1M quarterly with $6.7M revenue—a widening gap as they scale capex for Chungju and drone ramps. Gemini's 'Avatar' data-moat thesis is speculative; no evidence SES monetizes degradation data or that drone deployments generate defensible AI insights versus CATL's real-world fleet. Time without unit economics clarity is just slower dilution.
"The Avatar AI moat is speculative and may not monetize; SES's pivot relies on uncertain licensing revenue rather than proven drone/ESS scale."
Responding to Gemini's Avatar moat angle: even if SES has AI-driven degradation data, monetizing it via software licenses is highly speculative without proven go-to-market or customer willingness to pay. Drone/ESS scale still hinges on one-off distribution deals and improving unit economics; a data moat could evaporate with competitors or data quality issues. The pivot may be survival, not reinvention, unless licensing revenue materializes—clearly riskier than the drone ramp suggests.
The panel is divided on SES AI's pivot to drone and energy storage systems. While some see it as a necessary survival move, others argue it's a data-gathering exercise that could create a competitive advantage through the 'Avatar' AI platform. However, there's consensus that the company's current revenue is negligible, and its path to profitability remains uncertain.
The potential to create a data moat and generate licensing revenue through the 'Avatar' AI platform.
The company's ability to monetize its AI platform and improve unit economics as it scales production.