WEN - AI is coming to restaurants - watch these stocks
2023-05-31 08:47:30 ET
Artificial intelligence will be taking more orders at fast-food drive-thru lanes as the technology continues to take off.
Jack in the Box ( JACK ) chain Del Taco plans to roll out voice A.I. at the drive-thru with Presto and CKE Restaurants (operator of Carl's Jr & Hardee's) is expanding Voice A.I. deployment at participating drive-thru locations nationwide.
Cowen analyst Andrew Charles noted that both Del Taco and CKE have outsized California concentration, where the minimum wage rates are higher than the U.S. average at $15.50 per hour and even higher in some urban areas.
Wendy's ( WEN ) is also in the AI game with a partnership with GoogleCloud to pilot Wendy's FreshAI at a restaurant in Columbus, Ohio in June. Meanwhile, restaurant giant McDonald's ( NYSE: MCD ) is in the early stages of testing AI in the ordering process both in stores and in drive-thru lanes.
Shares of AI-related Presto Automation ( PRST ) have been very volatile over the last week after CEO Krishna Gupta said on CNBC that he is taking calls from restaurant companies, franchisees and board members about integrating AI technology in operations.
"We think we've sort of stumbled upon this amazing convergence of the technology being ready just at this time and the market being ready with labor costs going up and people realizing, 'Wow, we should be doing this."
Presto ( PRST ) describes itself as providing enterprise-grade AI solutions for the nation’s largest hospitality brands. The company has stated its industry-leading automation and voice AI technology improves order accuracy, reduces labor costs, and increases revenue for superior drive-thru and dine-in experiences.
On Wall Street, analysts have said the smart integration of AI could separate some winners from losers, but also noted a risk of alienating customers if not thoroughly tested.
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AI is coming to restaurants - watch these stocks