Not so long ago, we heard about McDonald’s (NYSE:MCD) efforts to bring artificial intelligence (AI) to the drive-through window. It didn’t work out so well, but SoundHound (NASDAQ:SOUN), which specializes in voice-driven AI, is moving to make it the new standard. However, SoundHound was flat in Wednesday afternoon’s trading, so investors may be taking that same wait-and-see approach.
Reports suggest there’s quite a market for AI-driven restaurant operations. In fact, 16% of restaurant operators are looking to make investments in this area just this year alone. Right now, it’s largely limited to large-scale chain operations like McDonald’s. But as the technology becomes more available, that will likely expand.
SoundHound is eager to land a piece of that action itself. Currently, it notes that its AI is capable of 90% accuracy in order-taking, which is actually better than the typical human rate of 80% to 85%. Given how the McDonald’s pilot program bungled orders—including randomly adding huge quantities of food and drink—it’s easy to wonder just how badly the botches would be in the 10% of orders even SoundHound claims to miss.
Building Tomorrow’s Drive-Through
SoundHound is eagerly building tomorrow’s drive-through. It recently acquired Allset to aid in that, which should help it develop an even better AI food ordering system. Since Allset’s specialty was food ordering systems, SoundHound may be able to put those to work in filling in the gaps, as well as that 10% of botched orders.
There were no layoffs as a result of the purchase—SoundHound brought everyone on board, including Allset’s founders—and SoundHound landed access to Allset’s current partners, which should also open up some new markets for SoundHound technology.
Is SoundHound a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SOUN stock based on four Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 5.97% loss in its share price over the past year, the average SOUN price target of $7.50 per share implies 90.36% upside potential.
