1. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 83
Chipotle Mexican Grill, Inc. (NYSE:CMG) is the largest fast-casual restaurant brand in the United States, with projected systemwide revenues of $11.3 billion by 2024. By the end of 2024, it had 3,726 stores spread over the United States, with a minor presence in Canada, the United Kingdom, France, and Germany. The company serves burritos, burrito bowls, tacos, quesadillas, and drinks. The company’s entire revenue comes from restaurant sales and delivery fees.
The five pillars of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s business strategy are operating profitable restaurants; luring and keeping varied talent; establishing the brand as well-known, relevant, and adored; making significant investments in restaurant technology and innovation; and improving consumer accessibility and convenience. Morningstar analysts believe that the company has established a long-lasting niche in the US restaurant market by drawing customers away from both casual dining and traditional fast-food rivals with its affordable menu prices, exceptional convenience, and “food with integrity.”
In the first quarter of 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG)’s sales surged 6.4% to $2.9 billion due to restaurant openings, making it the Best Food Stock. However, comparable store sales decreased 0.4% as a result of fewer transactions. The operating margin at the restaurant level dropped 130 basis points to 26.2%.
ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter:
“We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol’s August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.”
Overall, CMG ranks first among the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of fast food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CMG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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