Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Is SBUX a good stock to buy? We came across a bullish thesis on Starbucks Corporation on Quality At A Fair Price’s Substack by Longacres Finance. In this article, we will summarize the bulls’ thesis on SBUX. Starbucks Corporation's share was trading at $102.28 as of June 11th. SBUX’s trailing and forward P/E were 75.39 and 33.56 respectively according to Yahoo Finance."I Wanna Buy It," Says Jim Cramer About Starbucks (SBUX)

Starbucks Corporation (SBUX) is the world’s leading specialty coffee retailer with over 40,000 stores globally, operating a premium beverage and food ecosystem built around its brand moat and scale advantages. The stock trades near $99 per share versus an implied fair value of about $107, suggesting roughly 7% undervaluation, supported by a 2.50% dividend yield slightly above its 5-year average of 2.32%, indicating historically attractive entry levels.

Read More: 15 AI Stocks That Are Quietly Making Investors Rich

Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential

Starbucks remains a mature compounder, but its dividend growth has normalized, with the 10-year CAGR near 14% while 3-year and 5-year CAGRs have slowed to roughly 7–8%, reflecting a shift toward stable cash returns rather than high-growth dividend expansion. Despite this, the stock continues to screen strongly under dividend yield theory frameworks, with expected future return potential of about 23–24%, primarily driven by earnings growth of nearly 19.5%, while multiple expansion contributes under 2% and dividend yield about 2.5%.

This indicates returns are fundamentally driven rather than reliant on rerating, reinforcing quality compounding characteristics. Performance decomposition shows an average CAGR of 5.18%, with undervalued periods generating 6.81% returns versus 0.54% in overvalued regimes, highlighting valuation sensitivity over time. A DYT alpha signal of 6.27% reinforces this mispricing asymmetry, suggesting attractive entry points can enhance long-term outcomes.

Overall, Starbucks represents a resilient consumer franchise where modest undervaluation, strong cash generation, and earnings-driven compounding support an attractive risk-adjusted profile with limited dependence on multiple expansion or dividend acceleration and a consistent long-term compounding profile across cycles supported by brand strength and pricing power and resilience.

Previously, we covered a bullish thesis on Starbucks Corporation by Business Model Mastery in May 2025, which highlighted the behavioral habit machine, loyalty flywheel, global store expansion, and margin strength through its closed-loop ecosystem. SBUX's stock price has appreciated by approximately 25.25% since our coverage. Longacres Finance shares a similar view but emphasizes on valuation-driven compounding over behavioral moat.

Story Continues

Starbucks Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held SBUX at the end of the first quarter which was 59 in the previous quarter. While we acknowledge the risk and potential of SBUX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBUX and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Disclosure: None.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Starbucks (SBUX) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this coffee chain have returned -3.9% over the past month versus the Zacks S&P 500 composite's -0.2% change. The Zacks Retail - Restaurants industry, to which Starbucks belongs, has gained 2% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Starbucks is expected to post earnings of $0.65 per share for the current quarter, representing a year-over-year change of +30%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $2.4 points to a change of +12.7% from the prior year. Over the last 30 days, this estimate has changed +0.5%.

For the next fiscal year, the consensus earnings estimate of $3.07 indicates a change of +27.8% from what Starbucks is expected to report a year ago. Over the past month, the estimate has changed +1.4%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Starbucks.

Story Continues

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS12-month consensus EPS estimate for SBUX

Revenue Growth Forecast

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Starbucks, the consensus sales estimate for the current quarter of $9.47 billion indicates a year-over-year change of +0.1%. For the current and next fiscal years, $38.27 billion and $40.19 billion estimates indicate +2.9% and +5% changes, respectively.

Last Reported Results and Surprise History

Starbucks reported revenues of $9.53 billion in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $0.5 for the same period compares with $0.41 a year ago.

Compared to the Zacks Consensus Estimate of $9.17 billion, the reported revenues represent a surprise of +3.92%. The EPS surprise was +13.64%.

Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates each time over this period.

Valuation

Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Starbucks is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Starbucks. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

McDonald's Corporation MCD stock has fallen 12.8% over the past three months compared with the industry's decline of 6.8%. In the same time frame, the S&P 500 has returned 11%.

Investor sentiment has been pressured by concerns about a softer consumer spending environment, rising commodity costs, margin pressures and expectations of slower near-term sales growth. While the fast-food giant continues to gain market share and execute well operationally, Wall Street appears focused on the hurdles that could limit earnings growth in the coming quarters.

On the other hand, MCD has also underperformed compared with industry peers such as Starbucks Corporation SBUX and Yum! Brands, Inc. YUM, as shown in the chart below.

Price PerformanceZacks Investment Research

Image Source: Zacks Investment Research

Why Has McDonald's Stock Lost Momentum?

A key concern is the continued pressure on lower-income consumers, a customer group that represents an important portion of McDonald's traffic. Management noted that while higher-income consumers remain resilient, lower-income diners are still reducing spending as they grapple with elevated fuel prices and broader inflation. Although McDonald's value initiatives have helped recapture some of these customers, demand from this group remains weaker than historical levels, creating uncertainty around traffic growth.

Inflationary pressures are also weighing on investor confidence. Beef prices remain elevated globally, increasing operating costs across the system. Franchisees in both the United States and international markets are facing higher food, labor and operating expenses, which are putting pressure on profitability. While McDonald's has leveraged supply-chain efficiencies and hedging strategies to mitigate some of these challenges, management warned that inflationary risks could persist into late 2026 and beyond.

Another issue is profitability. Despite healthy sales growth during the first quarter, management admitted that margins at company-operated restaurants in the United States were below expectations. Higher labor investments combined with restrained pricing actions hurt profitability, raising concerns about the pace of margin recovery. The company is now reviewing whether some company-operated restaurants could generate better returns under franchise ownership.

Investors are also digesting management's outlook for the second quarter. The company expects a noticeable slowdown in comparable-sales growth following difficult comparisons with last year's highly successful Minecraft promotion. Although management remains optimistic about the underlying strength of the business, a slower growth trajectory often weighs on investor sentiment. Geopolitical uncertainty is another overhang. Ongoing tensions in the Middle East have increased supply-chain risks and contributed to higher energy and commodity costs. While the direct impact on first-quarter results was limited, the situation has added another layer of uncertainty for global consumer companies.

Story Continues

What Is McDonald's Doing to Revive Growth?

McDonald's is responding aggressively by reinforcing its value leadership. The company recently expanded its McValue platform with a menu featuring items priced below $3 and a new $4 Breakfast Meal Deal. These offerings complement existing value bundles and are designed to attract cost-conscious consumers while driving traffic across dayparts.

The company is also leaning heavily on marketing and brand partnerships. Recent collaborations with Netflix and other entertainment franchises have helped generate consumer engagement, while the upcoming FIFA World Cup sponsorship is expected to provide another significant traffic-driving opportunity across key markets.

Menu innovation remains a major priority as well. McDonald's has launched a new beverage platform in several markets, including the United States, Germany and Canada. The lineup features refreshers, crafted sodas and upcoming energy-drink offerings. Management views beverages as a sizable long-term growth category capable of driving incremental sales and customer visits.

At the same time, the company continues to gain market share in most of its major markets. Strong execution across value, marketing and menu innovation helped McDonald's deliver positive comparable-sales growth and maintain momentum despite a difficult operating backdrop. Management also reaffirmed its long-term expansion plans and remains committed to reaching approximately 50,000 restaurants globally by 2027.

McDonald's Growth Projection Encourages

In the past 30 days, the company's earnings for 2026 and 2027 have decreased by 14 cents each to $12.93 and $14.12, respectively. The Zacks Consensus Estimate for MCD's 2026 and 2027 earnings per share indicates a year-over-year increase of 6% and 9.2%, respectively.Zacks Investment Research

Image Source: Zacks Investment Research

The consensus estimate for revenues is pegged at $28.42 billion and $30.08 billion for 2026 and 2027, implying a year-over-year improvement of 5.7% and 5.8%, respectively.

MCD Stock Trades at a Discount

McDonald's is currently valued at a discount compared with its industry on a forward 12-month price-to-earnings basis. The company's forward 12-month P/E ratio stands at 20.99X, lower than the industry's average of 22.24X. Meanwhile, Starbucks and Yum! Brands are trading at P/E ratios of 34.42X and 21.37X, respectively.

P/E (F12M)Zacks Investment Research

Image Source: Zacks Investment Research

Buy the Dip or Stay Away?

Despite McDonald's strong brand, market-share gains and ongoing growth initiatives, investors may prefer to stay on the sidelines for now due to several near-term challenges. The company continues to face pressure from cautious spending among lower-income consumers, while persistent inflation in food, labor and operating costs is weighing on profitability across its restaurant network.

Management has also acknowledged margin weakness in its company-operated stores and expects softer sales momentum in the near term. Although McDonald's is investing in value offerings, marketing campaigns and menu innovation to support growth, these initiatives may take time to offset the impact of a challenging consumer environment and rising costs. With earnings estimates moving lower and multiple external uncertainties still clouding the outlook, investors may find better risk-reward opportunities elsewhere until clearer signs of sustained demand improvement and margin recovery emerge.

MCD currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

McDonald's Corporation (MCD) : Free Stock Analysis Report

Yum! Brands, Inc. (YUM) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Casey's General Stores Inc.'s (CASY) shares soared 20.3% after posting fourth-quarter fiscal 2026 adjusted earnings of $4.37 per share, beating the Zacks Consensus Estimate of $3.36 per share. Shares of Super Micro Computer Inc. (SMCI) plunged 28% following the company's decision to raise $7 billion in equity-related deals to cover the purchase costs of hardware components. Cracker Barrel Old Country Store Inc.'s (CBRL) shares jumped 22.6% after the company raised its full-year revenues and earnings guidance. Shares of Starbucks Corp. (SBUX) rose 1.4% after its CEO Brian Niccol said that the company is likely to double its store count of 22,000 outside the United States.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report

Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

This article first appeared on GuruFocus.

Starbucks (NASDAQ:SBUX) is putting global expansion back in focus, with Chief Executive Officer Brian Niccol saying the coffee chain may still have far more room to grow outside the United States. Speaking at the Evercore Consumer and Retail Conference on Tuesday, Niccol said Starbucks has 22,000 stores outside the US and suggested there is no reason that number cannot double.

Warning! GuruFocus has detected 3 Warning Signs with DIDIY. Is SBUX fairly valued? Test your thesis with our free DCF calculator.

Niccol also pointed to more growth at home, saying Starbucks can add at least 5,000 more stores in the US. He highlighted opportunities between Texas and Virginia, as well as in the center of the country, noting that Starbucks has leaned too heavily toward the West Coast and East Coast while leaving parts of the middle of the country less developed.

For investors, the message is straightforward: Starbucks may still have a long runway in both international and domestic markets, even after building a footprint of more than 41,000 stores across 89 markets worldwide, including partner-operated locations. Close to 23,000 of those stores are outside the US and Canada, giving the company a large base for possible expansion. Starbucks shares rose 2.7% at 12:41 p.m. in New York trading.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Starbucks is exploring options for its Japanese business, including a potential stake sale or initial public offering, according to Bloomberg.

Early-stage conversations with investment banks have taken place as the company seeks to map out a direction for its Japan operations, people familiar with the matter told Bloomberg, who asked not to be named given the private nature of the discussions. Potential buyers, including private equity firms and strategic industry players, could be drawn to a transaction that people familiar put at somewhere between 400 billion yen and 500 billion yen in value, or roughly $2.5 billion to $3.1 billion. No final decisions have been made, the people said.

Starbucks declined to comment.

With a footprint of roughly 2,100 stores, Japan ranks among the company's most significant international markets. Starbucks' most recent annual report counted 1,883 locations in the country as of September 2025, representing close to 9% of its worldwide store network. The Japan unit was fully absorbed into Starbucks' corporate structure after Sazaby League sold its stake back to the chain in 2014; Starbucks subsequently removed the subsidiary from Japanese stock exchange listings the following year.

The potential move follows Starbucks' sale of a 60% stake in its China retail operations to Boyu Capital, which closed in April and valued those operations at $4 billion. Taken together, the China transaction and the deliberations over Japan suggest the company is reconfiguring its international structure around partnerships that require less direct ownership, Bloomberg Intelligence analysts said.

At the company's April earnings call, Niccol described the quarter as "outstanding" for Japan, pointing to a surge in New Year's foot traffic, healthy tourism numbers, and the momentum of recently introduced products. Second-quarter results showed a 6.2% year-over-year gain in global comparable store sales — the company's best such reading in roughly two and a half years.

Investors would likely welcome efforts to unlock value from the Japan operations, said Edward Lewis of Rothschild & Co Redburn, who also noted that the unit does not currently occupy a central role in how markets assess the company's overall story, according to Reuters.

Starbucks stock was up about 1% in early trading Wednesday.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

For decades, coffee has been the foundation of the coffee shop business. But some of the industry's biggest growth opportunities are increasingly coming from beverages that contain little to no coffee at all.

This summer, major coffee chains are rolling out a wave of fruity refreshers, frozen drinks, teas, and specialty beverages as they compete for customers beyond the traditional morning coffee occasion. The shift reflects a broader strategy taking hold across the restaurant industry, where beverages have become one of the most important drivers of traffic, profitability, and customer engagement.

The trend comes as consumers seek greater variety, younger customers gravitate toward customizable and visually appealing drinks, and restaurant operators look for new ways to increase visit frequency. As a result, coffee chains are investing heavily in beverage innovation that extends beyond their core coffee offerings.

Coffee remains a main category, but its growth potential is naturally limited by established consumption habits. Refreshers, teas, frozen beverages, and specialty drinks help brands reach a wider audience and create additional purchase occasions throughout the day.

Starbucks, Luckin Coffee, and Dunkin' are among the latest chains embracing that strategy, each launching new seasonal beverage lineups centered on fruit flavors, refreshment, and limited-time appeal.

While some of the drinks still incorporate coffee, it's becoming clear that these chains are increasingly relying on non-coffee beverages as a key driver of future growth.

Starbucks expands frozen beverage linup

Starbucks (SBUX) recently unveiled four new Blended Energy Refreshers, combining fruit flavors with either lemonade or coconut milk, blended with ice and real fruit pieces.

The new lineup includes:

Blended Mango Dragonfruit Energy Refresher Blended Mango Strawberry Energy Refresher Blended Pink Energy Drink Blended Matcha Lemonade

The frozen beverages will launch at Starbucks locations nationwide beginning July 14, according to a company announcement.

The introduction highlights Starbucks' continued effort to expand beyond traditional coffee offerings as it competes with other brands for customers seeking refreshing beverages during the summer months.

Luckin Coffee leans into citrus flavors

Luckin Coffee (LKNCY) has also introduced four limited-time beverages as part of its Orange C series, combining orange juice with various drink formats.

The lineup includes:

Orange Americano: Hot or iced Americano with orange juice Orange Velvet Latte: Espresso and orange juice, topped with an orange-infused cream layer, served hot or iced Orange Iced Tea: Hot or iced jasmine tea with orange juice Orange Grapefruit Frappe: Jasmine tea blended with orange juice and ice, topped with whipped cream

Story Continues

While two beverages contain coffee, the broader launch follows the same fruit-focused strategy seen across the industry. Notably, half of the lineup consists of non-coffee drinks, reinforcing the growing emphasis on refreshment beverages over traditional coffee products.

The Orange C lineup is currently available at all Luckin Coffee locations in New York, the company confirmed to TheStreet via email.

Dunkin' doubles down on refreshers through Barbie partnership

Dunkin' has taken a similar approach through its latest collaboration with Barbie, introducing seven pink-themed beverages centered around its new Barbie Pink Strawberry Cold Foam.

The promotion includes several refresher variations, matcha beverages, and coffee drinks featuring the seasonal cold foam topping.

The offerings include:

Ultimate Pink Daydream Refresher Double Strawberry Daydream Refresher Pink Mango Daydream Refresher Pink Cherry Daydream Refresher Strawberry Cloud Matcha Strawberries & Creme Cloud Dunkalatte Almond Strawberry Shortcake Iced Coffee

The collaboration is now available nationwide at Dunkin' locations, according to a company announcement.

Like Starbucks and Luckin Coffee, Dunkin' is using limited-time beverage innovation to create excitement and encourage repeat visits during the peak summer season.

Although each brand is taking a different approach, the launches share a common theme. Coffee chains are increasingly using non-coffee drinks to attract customers beyond traditional coffee drinkers and create new consumption occasions throughout the day.Coffee chains look beyond traditional coffee amid growing competition.Shutterstock

Competition among coffee chains continues to intensify

Recent foot traffic data underscores the increasingly competitive environment facing coffee chains.

According to Placer.ai, Starbucks recorded a nearly 1% year-over-year decline in visits during the first quarter of 2025, while Dunkin' experienced a 1.7% drop.

However, both brands appear to have regained momentum later in the year. During the third quarter of 2025, Starbucks visits increased 0.7% year-over-year, while Dunkin' visits rose 1.7%, according to Placer.ai's latest data.

Shira Petrack, Head of Content and industry analyst at Placer.ai, said seasonal promotions and limited-time beverage launches have helped drive renewed customer engagement.

At the same time, competition within the coffee category continues to intensify. While there is no public traffic data directly comparing Luckin Coffee to Starbucks and Dunkin', the chain has expanded rapidly since its U.S. debut in June 2025 and now operates 14 locations across New York City.

Together, those trends suggest consumers remain willing to visit coffee chains when presented with compelling new products, even as discretionary spending remains under pressure and shoppers become increasingly selective about where they spend their money.

Why beverages matter more than ever

The industry's growing focus on beverages is rooted in economics.

Restaurants typically operate on relatively thin net margins, often ranging between 3% and 6%, according to the latest industry data from Toast.

Drinks, however, can generate significantly higher margins than food items due to their comparatively low ingredient costs and premium pricing.

Beverage gross margins can range from 60% to 80%, while food margins are generally lower at approximately 65% to 70%, according to KitchenNmbrs. In many cases, a drink that costs only a few cents to produce can be sold for several dollars.

That profitability makes beverages an attractive growth opportunity for restaurant operators looking to improve financial performance without significantly increasing operational complexity.

"In a landscape where consumers increasingly perceive grocery stores as offering ‘much better' value (55 percent) than restaurants, limited-service restaurants must innovate to regain their footing," said Rich Products Senior Customer Marketing Manager Alyssa Barrett on QSR Magazine. "Specialty beverages offer a way to refresh the value proposition—not just in terms of cost, but in experience, convenience, and customization."

Here's some of my previous coverage on beverage menu innovations:

Starbucks drops another summer surprise as competition heats up Taco Bell makes menu move to take on McDonald’s and Starbucks Dunkin' copies trendy Starbucks menu move Chick-fil-A launches a new drinks-based restaurant brand

As beverage competition accelerates across the restaurant industry, coffee chains are increasingly positioning specialty drinks as a strategic growth engine. Beyond generating higher margins, these products can help brands diversify revenue streams, attract new customers, expand into additional dayparts, and strengthen long-term customer loyalty.

The latest launches from Starbucks, Luckin Coffee, and Dunkin' suggest the battle for coffee customers is increasingly being fought with drinks that aren't coffee at all.

Related: Starbucks brings back viral drink after 7 years, adds new item

This story was originally published by TheStreet on Jun 10, 2026, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

For Immediate Release

Chicago, IL – June 10, 2026 – Today, Zacks Investment Ideas feature highlights Eli Lilly LLY, Home Depot HD, Procter & Gamble PG and Starbucks SBUX.

Deja Vu? AI Overspending Fears Renew

Over the last three trading days, tech stocks, especially semiconductors and AI-adjacent names, have been crushed as investors rotated aggressively out of the sector. The Mag 7, the memory names and the broader semiconductor complex are all down sharply.

But this is not the first time. Since the AI boom kicked off in 2023, we have seen this story play out repeatedly. Each episode arrived with its own distinct headline scare, and each one, at least so far, was eventually bought.

Before getting into what's driving today's move, it's worth walking through the prior scares, because the pattern is instructive.

July–August 2024 — the monetization scare. This was the first real wobble. Google kicked off Big Tech earnings season with capital expenditures climbing sharply, and management struggled to give a clean answer on when that spending would translate into returns. Microsoft, for its part, framed AI monetization as something that would play out "over the next 15 years and beyond," not the near-term payback some investors were hoping for. The Nasdaq 100 fell more than 3% on July 24, its worst session since October 2022, and the anxiety bled into the violent early-August unwind of the yen carry trade. The core worry: the spending was unmistakably real, but the returns were not yet visible.

January 2025 — the DeepSeek shock. A Chinese startup claimed it had trained a model competitive with the leading US systems for under $6 million, using less advanced hardware. The read-through was that if frontier-level AI could be built far more cheaply, the case for hundreds of billions in GPU spending might be overstated. Nvidia lost roughly $593 billion in market value in a single session and the Philadelphia Semiconductor Index fell more than 9%, its steepest drop since the early-2020 COVID crash. Unlike the prior episode, this scare wasn't about slow returns, it was the fear that cheaper training would undercut the entire capex thesis. The selloff reversed quickly once the major hyperscalers reaffirmed their spending plans.

November 2025 — "AI bubble" fears. This one was a slower grind lower rather than a single-day crash, driven by stretched valuations and a growing chorus of skeptics. Michael Burry, of "The Big Short," argued that the hyperscalers were flattering their earnings by understating depreciation, extending the assumed useful life of AI chips and servers that, in his view, become obsolete far faster. The Nasdaq logged its worst week in months as institutional surveys showed a majority of investors believed AI stocks had become a bubble. The accounting angle made this a more sophisticated version of the bear case than earlier rounds.

Story Continues

Late January–February 2026 — the capex-guidance rout. This was the largest aggregate wipeout. A cluster of mega-caps shed well over $1 trillion in combined market value in a single week as fourth-quarter earnings revealed staggering capex plans, as Amazon alone guided to roughly $200 billion in infrastructure spending, a 56% jump and the highest commitment among the hyperscalers. A new fear joined the familiar one: not only was capex outrunning the cash flow funding it, but investors began to worry that AI itself was beginning to cannibalize the established software companies, the very names that had been considered safe AI winners.

An observation of my own: after years of watching markets, you'll notice these narratives often get assigned to the price action after the fact. Nothing in global markets happens in a vacuum, and prescribing a single tidy story to a selloff, while helpful for simplification, can be unhelpful for understanding the broader setup. Look closely and each of the four episodes above was triggered by a different worry, but each time an extended market that snaps its streak reaches for whichever AI-skeptic story best fits the tape that week.

Consider what else was happening underneath each "AI" selloff. The July–August 2024 drawdown is remembered as the "AI fatigue" trade, but the real violence came from the Bank of Japan's surprise rate hike unwinding the yen carry trade and a weak jobs report that tripped a recession indicator. The January 2025 DeepSeek shock hit a tape already on edge over a hawkish Fed, a 10-year yield near 4.7%, and fresh tariff threats. And the November 2025 "bubble" scare, while more genuinely valuation-driven, still rode on an unsettled Fed path and stretched positioning after a long summer melt-up. The AI story was the most quotable explanation each time, but it was hardly the only one.

That observation deserves its own deeper treatment, which we won't attempt here, but it's worth keeping in mind whenever a clean explanation gets attached to a messy move. Ultimately, markets move lower because there are more sellers than buyers, which is often an unsatisfactory explanation.

Other Factors Moving the Stock Market

In the current case, several variables are at play beyond the AI-spending headline.

Equities, tech and AI especially have been on a powerful run since the March lows that followed the onset of the US–Iran conflict. That rally pushed sentiment to heavily bullish extremes, and stretched positioning is precisely what leaves a market vulnerable to a sharp, fast reversal. When nearly everyone is already long and leaning the same way, there are few buyers left to absorb selling once it starts.

At the same time, interest rates have been grinding higher, pressured from two directions. Higher oil prices, a byproduct of the geopolitical backdrop have revived inflation concerns, while consistently robust labor market data has reduced the case for near-term rate cuts. Together, those forces put upward pressure on yields and raise the prospect of a less accommodative Federal Reserve.

As far as I can tell, last Friday's strong employment report was the initial catalyst, by pushing rate expectations higher, while the renewed AI-spending fears added fuel to the fire. Overextended positioning then did the rest, leaving the tape vulnerable to a negative feedback loop of selling, which is what we are seeing today.

The Bear Case for AI Stocks Isn't Unreasonable

While I doubt this marks the end of the AI boom, it would be a mistake to dismiss the bears. They are raising legitimate points.

The sheer scale of the spending. More than $1 trillion has been poured into AI through data-center infrastructure and capital raised for the model labs — OpenAI, Anthropic, and others. For 2026 alone, the major hyperscalers have collectively guided to somewhere in the range of $600–700 billion in capital expenditures.

The opacity around returns. There is real uncertainty about the return on investment in these data centers, and the economics of actually running the models are murkier than they appear. When you pay a monthly subscription to an AI provider, the cost of serving your prompts may well exceed what you're paying, meaning the usage is being subsidized by an unknown amount. Loss-leading is not a new strategy, as several of the Mag 7 built their dominance by absorbing losses to capture markets first. But it has never been attempted at anything close to this scale, and the path to sustainable margins remains undefined.

The circularity. A growing concern is how interlinked the major players have become. Nvidia has invested in "neocloud" providers, companies that rent out GPU computing power, which in turn use that capital to buy more Nvidia chips. Nvidia has also committed to invest heavily in OpenAI, which has pledged to spend enormous sums on the very compute that flows back through the ecosystem. Supporters frame this as a "virtuous circle" that locks in scarce supply and critics see it as a web of interdependent commitments where a stumble at one node could cascade through the whole structure.

The coming mega-IPOs. A wave of richly valued, deeply unprofitable companies, the likes of SpaceX, Anthropic, and OpenAI are coming to public markets. By entering the major indexes while still burning cash on opaque business models, they could introduce fresh vulnerability for passive investors who hold them by default. Viewed cynically, the whole sequence can look like an opportunity for venture capital and other early backers to cash out at the top before any unraveling.

These are all reasonable concerns, but it's worth being precise about what they rest on: the assumption that data-center investment is structurally unprofitable. That is largely true today. It is far less clear that it will remain true. The margins on AI infrastructure are still being discovered, and history with prior technology buildouts suggests that early-stage unprofitability is not the same thing as permanent unprofitability. The honest position is that the verdict is genuinely unknown, which is exactly why the tape whipsaws on every new data point.

Which Stocks Are Capturing the Flows

As money has come out of tech, it has been finding a home in the more defensive and beaten-down corners of the market. Today we're seeing real estate, consumer staples, healthcare, and some left-for-dead retail names catch a bid. Among the more interesting movers are Eli Lilly, Home Depot, Procter & Gamble andStarbucks, among many other established, cash-generative businesses that had been largely ignored while capital chased AI.

I'm not prepared to call this the start of a durable resurgence in these names, but the logic tracks. Most data points to a broadly healthy US economy even as investor attention has been monopolized by AI. If the economy continues to hold up, these unloved areas \could absorb a meaningful share of the flows rotating out of crowded tech.

This may raise more questions than it answers, and that's fine. Identifying the current environment is a more tractable task than predicting the future, and good portfolio management sometimes simply requires being appropriately defensive for the conditions in front of you today.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Procter & Gamble Company (The) (PG) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

The Home Depot, Inc. (HD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

This article first appeared on GuruFocus.

Starbucks (NASDAQ:SBUX) may be looking at another big international reset, with the company reportedly exploring options for its Japan business, including a possible stake sale.

Bloomberg reported that Starbucks has held early talks with investment banks as it studies what to do next in Japan. The market is a major one for the coffee chain, with about 2,100 stores, and most of them are directly operated by Starbucks. That makes Japan a meaningful business, not just a small overseas side bet.

Warning! GuruFocus has detected 2 Warning Sign with WOLF. Is SBUX fairly valued? Test your thesis with our free DCF calculator.

The review comes after Starbucks closed a deal in April to sell control of its China business to Boyu Capital, valuing that operation at $4 billion. So the bigger question is whether Starbucks is starting to prefer a lighter ownership model in some large international markets, while still keeping the brand and long term growth opportunity intact.

this is worth watching because a Japan stake sale could free up capital and reduce operating complexity. The next step is whether these early talks turn into a formal process.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Starbucks is reviewing options for its Japan business, including a possible stake sale, Bloomberg reported, citing people familiar with the matter.

The move comes shortly after the company completed the sale of a majority interest in its China retail operations.

The report added that the coffeehouse chain has held early discussions with investment banks to consider potential structures for its Japan unit.

Japan is one of the company’s largest markets with 2,100 outlets, most of which are operated directly.

A stake sale could value the unit at Y400bn ($2.5bn) to Y500bn, some of the people said, noting potential interest from sector peers and private equity funds.

An IPO of the Japan business is also being examined.

The review is still at an early stage, and no decisions have been made.

The company does not provide a separate breakdown for Japan, but CEO Brian Niccol said in April that performance there was “outstanding” last quarter, helped by New Year demand, tourism and new products.

Starbucks entered Japan in 1995 through a joint venture with Sazaby League and listed the local arm in 2001.

Sazaby sold its stake back to Starbucks in 2014, and the unit was delisted the following year.

Globally, Starbucks has rebounded from a downturn, with comparable store sales up 6.2% in the second quarter from a year earlier. Its shares are up 16% this year.

The chain sold a 60% stake in its Chinese retail operations to Boyu Capital in April. Its latest quarterly report notes this milestone aligns with plans for disciplined, sustainable growth in China.

"Starbucks reviews options for Japan unit, including stake sale – report" was originally created and published by Verdict Food Service, a GlobalData owned brand.

The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

View Comments