Is Sweetgreen Stock Poised for an Nvidia-Level Run?

Sweetgreen's (SG 2.23%) stock has been through the wringer in 2025. After a hot start last year, the fast-casual salad chain's shares have tumbled as growth cooled and profitability slipped back into the red. With shares trading at only a fraction of their all-time high of $53, some overly optimistic investors may hope the stock can quickly rebound to these levels in the near future, leading to Nvidia-like returns. Unfortunately, there's almost no chance that this will happen. Restaurants scale differently than chips and software. They're capital-intensive. Expansion is site by site, and unit economics ebb and flow with traffic, pricing, and labor. Sweetgreen may yet be a great long-term brand, but expecting an Nvidia-level run misunderstands how restaurant models compound. Even more, such a positive outlook downplays the severity of Sweetgreen's recent slump in key business metrics. There's a reason the stock has been hammered, and a big recovery anytime soon is unlikely. Image source: Getty Images. What has investors concerned Sweetgreen's second quarter showed why the stock reset. Revenue increased just 0.5% year over year to $185.6 million, as a 7.6% same-store sales decline (driven by a 10.1% drop in traffic and mix, partially offset by 2.5% menu pricing) offset contributions from new restaurant openings. Average unit volume (AUV), or the average trailing revenue for the last four fiscal quarters for all restaurants that have operated for at least 12 full months, slipped to $2.8 million from $2.9 million. Restaurant-level profit margin fell to 18.9% from 22.5% in the year-ago period, and the company reported a net loss of $23.2 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $6.4 million -- about half of what it was in the year-ago period. The chain did add nine net new restaurants in the period, but the overall picture was a big step back from 2024's momentum. Guidance reinforces the disappointing narrative. Management now expects fiscal 2025 revenue of $700 million to $715 million, up from about $677 million in the year-ago quarter. That's growth, but it's measured -- hardly the kind of operating acceleration that fuels a stock super-cycle. Furthermore, when it comes to profitability, the trend is actually downward. Management is guiding for full-year adjusted EBITDA to be between $10 million and $15 million, down from $18.7 million in 2024. Why scale won't look like Nvidia The Nvidia comparison sets an unrealistic bar. The artificial intelligence (AI) chipmaker has ridden explosive data center demand, ultra-high gross margins, and powerful network effects -- features that a restaurant chain can't replicate. Sweetgreen's path to value creation does involve operating leverage, but primarily only at the restaurant level. Additionally, this operating leverage will likely only surface if same-store sales are growing, and they're not.Even promising levers, like the company's "Infinite Kitchen" automation, work by grinding costs and boosting throughput over time, not by unlocking software-like economics and by achieving economies of scale by manufacturing units in mass volumes. Additionally, Sweetgreen's pricing power is very limited, given the intense competition in the fast-casual restaurant space. Nvidia, on the other hand, is still riding a wave of incredible pricing power, since competition has yet to create a good alternative to its AI chips. Yes, there are some credible catalysts. Digital remains a strength. The recently refreshed loyalty program could help boost the frequency of visits from its members. Automation should support labor optimization and consistency. But the near-term reality is that same-store sales are negative, restaurant-level margins stepped down, and management is guiding to modest adjusted EBITDA for the full year in the context of the stock's market capitalization of more than $1 billion as of this writing. In this context, a sustained "Nvidia-level run" is unlikely. The more reasonable upside is a multi-year, execution-driven climb as traffic stabilizes and margins recover. Sweetgreen is a differentiated brand with improving tools -- digital, loyalty, and automation -- to drive better economics over time. The playbook is clear, but it is capital-intensive, and there's a backdrop of uncertainty in the macro environment. Investors should keep an eye on Sweetgreen's same-store sales, restaurant-level margin, adjusted EBITDA, and the return on investment from Infinite Kitchen deployments. If those metrics trend up consistently, the stock should follow. But expecting a parabolic, Nvidia-style surge is the wrong framework.