What Do Restaurant Automation and Cancer Therapies Have in Common?
New products and technologies may help drive earnings growth for mid-sized companies.
Key Takeaways
Quick-serve restaurants are increasing their use of kitchen automation and AI forecasts to boost efficiency.
Checkpoint inhibitors and individualized neoantigen therapies aim to lengthen cancer patients’ lives.
Online learning brands are tapping AI to quickly create additional classes on a wider variety of subjects.
Innovation fuels growth. As the saying goes, build a better mousetrap, and the world will beat a path to your door. In our view, nobody embodies this idea better than mid-cap companies.
Although mid-caps may lack the scale and resources of larger firms, they can still establish their reputations and increase profits by introducing groundbreaking products to the market.
They’re not just constructing better mousetraps. These innovative companies are redefining possibilities with examples like pursuing cutting-edge cancer treatments, applying artificial intelligence (AI) to online learning and using robots to prepare your burrito bowl or salad.
If successful, these types of innovations could help drive sustainable earnings growth. Based on our research, we see particular potential in the following investment themes.
How AI Transforms Quick-Serve Restaurants
In quick-service restaurants, speed is crucial as it directly affects customer satisfaction and revenue growth.
This competitive pressure has led restaurant chains to experiment with technology like kitchen automation and AI forecasting to make their operations more efficient.
Building Robots to Assemble Burrito Bowls and Salads
Chipotle Mexican Grill has been testing automation equipment at a limited number of its stores.
The Augmented Makeline, a robotic assembly line, can fulfill online orders for bowls and salads. Meanwhile, human workers prepare food that can’t easily be automated, such as burritos, tacos and quesadillas.1
The potential impact of this automation could be sizable. Bowls and salads make up about 65% of Chipotle’s digital orders. Streamlining food prep could boost the multinational chain’s profits and improve order accuracy.
Chipotle has also trialed Autocado, a machine that cuts, cores and peels avocados so employees can mash them for guacamole. Autocado reportedly cuts the labor cost of making guacamole by 90% while getting 10% more material from each avocado.2
Predicting Demand for Chicken Wings in Real Time
Wingstop® is rolling out Smart Kitchen, an AI-powered system designed to speed up orders.
Every 15 minutes, the system tells employees how many chicken wings to prepare based on a forecast derived from hundreds of data points tailored to each location (e.g., weather, sporting events, sales trends). As a result, the time quoted for orders has dropped by 50%, while guest satisfaction scores have climbed by at least 8%.3
According to Wingstop, the implementation of Smart Kitchen is expected to increase the average unit volume (AUV), or average sales per location, from $2.1 million to $3 million. The company expects to implement the proprietary platform at all its locations by the end of 2025.4
Restaurant Automation Challenges
While automation can boost efficiencies, companies must also shoulder its implementation costs.
Consider Sweetgreen, for example. The company plans to deploy its robotic assembly line in half of its new locations this year. Each Infinite Kitchen costs between $450,000 and $550,000. However, since some of the robotic kitchen system’s components come from China, this price could rise by 15% under a higher U.S. tariff regime.5
Companies are still learning how these technologies withstand the pressures of daily use. Sweetgreen has advised that if Infinite Kitchen equipment glitches or fails, its operations and brand may suffer.6
New Cancer Treatments Aim to Boost Patients’ Immune Response
Globally, cancer researchers continuously seek new solutions to one of humanity’s oldest and deadliest diseases. Mid-cap companies also play a role, developing treatments that could diminish cancer’s impact.
We see potential in two specific areas: checkpoint inhibitors and individualized neoantigen therapies (INT).
Reducing Cancer’s Ability to Hide
Companies like Summit Therapeutics work to develop more effective checkpoint inhibitors, a type of treatment that makes it harder for cancer cells to hide in the body.
In a healthy person, the immune system seeks out and kills viruses and other threats while leaving normal cells alone. This is because normal cells produce immune checkpoints, molecules that signal the immune system not to destroy them.
Unfortunately, cancer cells can also produce immune checkpoints. These checkpoints camouflage cancer from the immune system and allow the illness to spread.
To solve this problem, researchers developed checkpoint inhibitors, treatments that reduce the effectiveness of immune checkpoints. Inhibitors “take the brakes off” the immune system.
Summit Therapeutics is addressing one of the biggest issues with checkpoint inhibitors: A more aggressive immune system may attack cancerous and healthy cells.
In the most severe cases, patients can suffer life-threatening organ damage.
Summit and its partner, Akeso Inc., are conducting clinical trials on ivonescimab. This inhibitor attempts to target immune checkpoints while managing the risk of side effects. Recent clinical trial updates indicate that the treatment decreased mortality risk in patients with locally advanced or metastatic non-small cell lung cancer.7
Amplifying the Immune System
If checkpoint inhibitors remove cancer cells’ ability to cloak themselves, INT revs the immune system’s ability to find those cells. Firms like BioNTech and Moderna are developing new treatments in this arena.
Neoantigens are mutated proteins produced by tumors or cancer cells that serve as a red flag for the immune system to neutralize those cells.
That’s how the process is supposed to work. However, the immune system sometimes fails to recognize neoantigens because cancer cells have different ways to disguise themselves.
To fight this, INT shines a brighter spotlight on those neoantigens.
Doctors take a sample of a patient’s blood or tumor to isolate the mutated parts of the proteins. INT then takes these fragments and reintroduces them to the body in a way that helps the immune system better recognize and attack the cancer. Think of it like teaching a dog to hunt for a specific scent.
The “individualized” part of INT is also essential.
Cancer cells are mutations that can develop in countless ways. This means that each person’s cancer may be, in some respect, unique to them. As a result, a treatment that is effective for one patient may not yield the same result for another.
Individualized neoantigen therapy addresses this issue by tailoring the treatment to a specific person.
New Cancer Treatment Challenges
We see two significant potential obstacles for new checkpoint inhibitors and personalized neoantigen therapy.
First, researchers face a formidable technical challenge in devising more effective cancer treatments.
Additionally, any new therapies must meet stringent regulatory requirements. Due to potential side effects, regulatory authorities are committed to ensuring that these treatments adhere to safety guidelines.
How AI Is Revolutionizing Online Learning
Online learning tools can transform any smartphone or laptop into a classroom. However, creating lessons, quizzes and other content requires time and money. More companies are starting to use AI tools to develop these courses more quickly and efficiently at scale.
While it’s still early, we believe this trend could become a competitive advantage for those businesses.
Making More Content Faster
Duolingo offers a few examples of how AI could streamline content creation.
During the first quarter, this learning app debuted nearly 150 language courses developed with AI.8 The company spent about 12 years designing its first 100 courses. This latest batch took about a year.9
AI also powers newer features on Duolingo Max, the company’s premium service tier. The app’s video chat lets users practice conversational skills with animated characters in real time.
Enhancing the User Experience
Coursera®, another popular learning platform, employs AI for content creation with a self-service approach.
The company offers a Course Builder tool that allows schools, businesses and governments to set up customized courses using just a few prompts. This tool leverages Coursera’s extensive content library while enabling users to incorporate their own materials.
Coursera is also using AI to enhance its user experience. In 2023, the platform launched Coursera Coach, an AI-powered tool that quizzes learners, addresses their questions and provides other one-on-one coaching.
Risks of AI in Online Education
While AI-generated content can benefit online learning companies, it may also have drawbacks.
Duolingo reported that its total gross margin declined year over year from 73% to 71.1% for the quarter ending March 31. The company attributed this decline to the costs associated with generative AI to expand its premium tier.10 However, Duolingo expects gross margins to improve in the future.
Duolingo also cautioned that AI-generated content could increase the risk of AI-related issues, including inaccurate "hallucinated" information.11
Weighing Opportunities and Risks in the Mid-Cap Space
New technologies and products have great potential, but don’t always thrive in the marketplace. As active asset managers, we look for companies we believe may have the most potential to succeed.
Our research focuses on identifying which companies' innovations could provide sustainable sources of earnings growth. We believe these new ideas can present attractive investment opportunities.
Authors
Explore Our Global Growth Equity Capabilities
Chipotle, “Chipotle Debuts Autocado and the Augmented Makeline by Hyphen in Restaurants,” September 16, 2024.
Vebu, “Autocado: Unlocking Latent Capacity in Food Service Operations,” accessed May 29, 2025.
Wingstop, Investor Presentation, May 13, 2025.
Wingstop, Investor Presentation, May 13, 2025; Ben Coley, “Wingstop’s Smart Kitchen Slashes Wait Times, Lifts Satisfaction, and Could Be Key to Driving $3M AUV,” QSR Magazine, May 16, 2025.
Sweetgreen, Form 10-K, for the fiscal year ended December 29, 2024; Form 10-Q, for the quarterly period ended March 30, 2025.
Sweetgreen, Form 10-K, for the fiscal year ended December 29, 2024.
Summit Therapeutics, “Interim Overall Survival Analysis Requested from Chinese Health Authorities Shows a Clinically Meaningful, Positive Trend Favoring Ivonescimab Compared to Pembrolizumab in PD-L1 Positive Advanced NSCLC from HARMONi-2 Study Conducted by Akeso in China,” Press Release, April 25, 2025.
Duolingo, Q1 2025 Shareholder Letter, March 31, 2025.
Duolingo, “Duolingo Launches 148 New Language Courses,” News Release, April 30, 2025.
Duolingo, Form 10-Q, for the quarterly period ended March 31, 2025.
Duolingo, Form 10-K, for the fiscal year ended December 31, 2023.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Historically, small- and/or mid-cap stocks have been more volatile than the stock of larger, more-established companies. Smaller companies may have limited resources, product lines and markets, and their securities may trade less frequently and in more limited volumes than the securities of larger companies.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
©2025 Morningstar, Inc. All Rights Reserved. Certain information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.