What Happened?
Shares of coffeehouse chain Starbucks (NASDAQ: SBUX) jumped 3.1% in the afternoon session after reports revealed it is developing in-house artificial intelligence (AI) tools to cut costs and reduce its reliance on software from vendors like Microsoft and IBM.
According to Bloomberg, the coffee chain is building its own AI-powered software to replace applications for tracking inventory and managing maintenance. The move is part of a broader effort targeting $2 billion in cost savings, including $400 million from lower software expenses.
More immediately, the company's enterprise technology division is on track to reduce its budget by approximately $30 million in the current fiscal year, with about $10 million of that coming from reduced software spending. Some of the new in-house software could be implemented by the end of the following year, pending test results.
After the initial pop, the shares cooled down to $106.96, up 3% from the previous close.
Is now the time to buy Starbucks? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Starbucks’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 9.2% on the news that the company reported better-than-expected revenue and profit for its first quarter of 2026.
The company posted revenue of $9.53 billion, an 8.8% increase from the same period last year, while its adjusted earnings per share of $0.50 beat consensus estimates by 13.6%.
A key highlight for investors was the 6.2% growth in same-store sales, a significant turnaround from the 1% decline in the prior year's quarter. The strong performance in sales at existing locations, coupled with the overall revenue beat, signaled to investors that the business is regaining momentum.
Starbucks is up 27.4% since the beginning of the year, and at $106.96 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Starbucks’s shares 5 years ago would now be looking at only $910.52.
ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.
AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.
