Okay, it is not quite intelligent burgers and fries, but iconic restaurant chain McDonald’s (MCD) doesn’t want to be last in the queue when it comes to the global AI surge.
Get your AI Orders Ready
The Golden Arches business, famed for its milkshakes, Big Macs, and fries, is, it appears, giving its 43,000 outlets worldwide a tech makeover. According to a report in the Wall Street Journal, the company is steadily introducing internet-connected kitchen equipment, AI-enabled drive-thrus, and AI-powered tools for managers.
The company is already using Alphabet (GOOGL) owned Google Cloud edge computing to analyze when kitchen equipment like McFlurry ice cream machines might break down and it wants to do more. Facial recognition to ensure orders are correct could also be on the menu.
Chief Information Officer Brian Rice is quoted in the piece as stating that its restaurants – and this comes as no surprise to parents of young kids or teenagers – can be “very stressful” experiences. That’s not just having to deal with a large number of customers, workers, and delivery people coming in and out of the doors, but also sticky or broken ordering machines. There is also that painful experience of having to return to a queue waving your receipt randomly in the air so that someone, anyone, can deal with “little Timmy” getting a vegetarian wrap rather than his favorite triple whatever.
Stock Continues to Deliver
There is no indication of how much this AI binge will cost the business, but it is seen as a necessary spend for McDonald’s. It recently posted sluggish January sales, and despite having a President who is famously a fan of its food, there is pressure on it and the fast-food industry as a whole given greater concerns over obesity and healthy living.
But, in times of financial distress for many families, McDonald’s remains a low-cost and generally fun family experience. Indeed, MCD is up around 6% in the year to date and 7% in the last 12 months. The hope is that AI will keep people coming back for more.
Is MCD a Good Stock to Buy Now?
On TipRanks, MCD has a Moderate Buy consensus based on 14 Buy and 10 Hold ratings. Its highest price target is $360. MCD stock’s consensus price target is $327.52 implying an 6.98% upside.
