Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle's Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Starbucks остаётся сильным брендом с высокой валовой маржой и устойчивой операционной прибылью, но оценка уже выглядит требовательной. P/E 68.39, P/S 2.66 и P/FCF 47.89 заметно выше медианы отрасли, что ограничивает потенциал дальнейшего переоценивания без ускорения роста прибыли и свободного денежного потока. При этом выручка, валовая прибыль, EBITDA, операционная прибыль и чистая прибыль в TTM остаются положительными и в целом поддерживают инвестиционный кейс. Маржа валовой прибыли 67.49% очень сильная, а ROI 24.70% указывает на неплохую эффективность использования капитала. Однако чистая маржа 3.89% и ROA 4.66% выглядят скромнее и за последние периоды заметно ослабли относительно более сильных значений в начале ряда. Ликвидность остаётся слабым местом: current ratio 0.92 и quick ratio 0.73 ниже комфортных уровней, что повышает чувствительность к краткосрочным обязательствам. Долгосрочный долг 13.08 млрд и общие обязательства 39.02 млрд при отрицательном собственном капитале создают структурный риск для баланса, даже если долговая нагрузка по отдельным относительным метрикам выглядит не критичной. Дивидендная доходность 0.58% снизилась по сравнению с более высокими уровнями в течение года, поэтому дивидендная поддержка для акций сейчас ограничена. Динамика мультипликаторов в целом не показывает явного удешевления: P/E и P/FCF остаются высокими, а P/S также существенно выше отрасли. На этом фоне сильные стороны бизнеса — бренд, высокая валовая маржа и положительный денежный поток — уже во многом отражены в цене. Слабые стороны — дорогая оценка, давление на чистую маржу, слабая ликвидность и отрицательный капитал — сдерживают апсайд. Для инвестора это означает скорее качественный, но не дешёвый актив, где для существенного роста котировок нужен более убедительный прогресс в прибыли и денежной генерации. Поэтому фундаментальная картина умеренно сдерживает целевую оценку, а не поддерживает её повышение.

Starbucks Corporation

Сильный индекс, незначительно упал. Быки в растерянности.

Strong index, slightly down. The bulls are confused.

Сильный индекс, незначительно вырос. Рынок на стороне быков.

Strong index, slightly up. The market is on the bulls' side.

Сильный индекс, значительно вырос. Приток средств в лонги на высоком уровне.

Strong index, significantly up. Inflow of funds into longs at a high level.

Сильный бренд и высокая валовая маржа поддерживают SBUX, но дорогие мультипликаторы, слабая ликвидность и отрицательный капитал ограничивают потенциал переоценки.

Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Alphabet Inc (Symbol: GOOG), where a total volume of 146,192 contracts has been traded thus far today, a contract volume which is representative of approximately 14.6 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 64% of GOOG's average daily trading volume over the past month, of 22.8 million shares. Particularly high volume was seen for the $360 strike put option expiring July 17, 2026, with 5,326 contracts trading so far today, representing approximately 532,600 underlying shares of GOOG. Below is a chart showing GOOG's trailing twelve month trading history, with the $360 strike highlighted in orange:
Cincinnati Financial Corp. (Symbol: CINF) options are showing a volume of 3,633 contracts thus far today. That number of contracts represents approximately 363,300 underlying shares, working out to a sizeable 58.6% of CINF's average daily trading volume over the past month, of 620,415 shares. Especially high volume was seen for the $180 strike call option expiring June 18, 2026, with 3,573 contracts trading so far today, representing approximately 357,300 underlying shares of CINF. Below is a chart showing CINF's trailing twelve month trading history, with the $180 strike highlighted in orange:
And Starbucks Corp. (Symbol: SBUX) options are showing a volume of 46,863 contracts thus far today. That number of contracts represents approximately 4.7 million underlying shares, working out to a sizeable 58% of SBUX's average daily trading volume over the past month, of 8.1 million shares. Especially high volume was seen for the $103 strike call option expiring June 12, 2026, with 32,842 contracts trading so far today, representing approximately 3.3 million underlying shares of SBUX. Below is a chart showing SBUX's trailing twelve month trading history, with the $103 strike highlighted in orange:
For the various different available expirations for GOOG options, CINF options, or SBUX options, visit StockOptionsChannel.com.
Further GOOG Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Thursday Option Activity: GOOG, CINF, SBUX

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 Performance
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.
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.
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)
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).
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McDonald's Stock Slides 13% in 3 Months: Buy the Dip or Stay Away?

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.
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Company News for Jun 11, 2026

Starbucks (SBUX) closed the most recent trading day at $98.76, moving +1.39% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.62%. On the other hand, the Dow registered a loss of 1.87%, and the technology-centric Nasdaq decreased by 1.98%.
The stock of coffee chain has fallen by 8.6% in the past month, lagging the Retail-Wholesale sector's loss of 6.71% and the S&P 500's loss of 0.03%.
Market participants will be closely following the financial results of Starbucks in its upcoming release. The company's upcoming EPS is projected at $0.65, signifying a 30.00% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $9.47 billion, showing a 0.13% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.4 per share and revenue of $38.27 billion, which would represent changes of +12.68% and +2.91%, respectively, from the prior year.
Any recent changes to analyst estimates for Starbucks should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.49% increase. Starbucks is holding a Zacks Rank of #1 (Strong Buy) right now.
Digging into valuation, Starbucks currently has a Forward P/E ratio of 40.61. This valuation marks a premium compared to its industry average Forward P/E of 20.26.
It's also important to note that SBUX currently trades at a PEG ratio of 1.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 1.79 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 208, placing it within the bottom 15% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Starbucks (SBUX) Rises As Market Takes a Dip: Key Facts

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.
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.
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This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Zacks Investment Ideas feature highlights: Eli Lilly, Home Depot, Procter & Gamble and Starbucks

(RTTNews) - Starbucks Corp. (SBUX) is exploring strategic options for its Japan business, including a potential stake sale, Bloomberg reported Wednesday citing people familiar with the matter.
The company has held preliminary discussions with investment banks as it evaluates alternatives for one of its largest international markets, the report quoted people as saying.
The review comes close on the heels of Starbucks closing the sale of a 60% stake in its China business to private equity firm Boyu Capital in April. Japan is one of the company's largest markets, with about 2,100 stores, most of which are directly operated.
On Tuesday, Starbucks shares closed at $97.41, up 2.73%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Starbucks Reportedly Reviews Strategic Alternatives For Japan Business Including Stake Sale

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.
Image Source: TradingView
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.
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 (LLY), Home Depot (HD), Procter & Gamble (PG) and Starbucks (SBUX), 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.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Deja Vu? AI Overspending Fears Renew

Key Points
Starbucks maintains a massive global footprint with over 40,000 stores across 78 international markets.
Texas Roadhouse continues to deliver robust revenue growth and stronger net margins than its coffee-focused peer.
Which restaurant leader is the more compelling investment for your portfolio as we head toward 2026?
Choosing between a global coffee powerhouse and a domestic dining favorite depends on your preference for scale versus growth. We compare Starbucks (NASDAQ:SBUX) and Texas Roadhouse (NASDAQ:TXRH) to see which is a better buy today.
Starbucks operates a sprawling network of company-owned and licensed cafes, relying on its premium brand and massive scale to dominate the global coffee market. Texas Roadhouse focuses on a high-energy, casual dining experience within the United States, prioritizing value and hospitality. While both are giants in the dining space, their financial structures and growth trajectories differ significantly.
The case for Starbucks
Starbucks generates revenue by roasting and selling high-quality arabica coffee, tea, and food through its vast network of retail stores. The company leverages three primary channels: company-operated cafes, licensed stores, and its Channel Development segment, which brings packaged goods to grocery shelves. A critical part of its global distribution is handled through a partnership with Nestlé, which manages certain Starbucks-branded products internationally.
In FY 2025, revenue reached nearly $37.2 billion, up roughly 2.8% from the previous year. Despite the increase in sales, net income for the period was approximately $1.9 billion, resulting in a net margin of 5.0%. This figure reflects a decrease from the previous year, as the company faced shifting consumer habits and rising operational costs across its global markets.
From a financial health perspective, Starbucks reported a debt-to-equity ratio of -3.3x as of September 2025, indicating that its total liabilities exceed its shareholders’ equity. The current ratio, which measures the ability to pay short-term bills with short-term assets, was roughly 0.7x. The company remains a cash-generating machine among consumer discretionary stocks, producing roughly $2.4 billion in free cash flow, which is the money left over after paying for operations and equipment.
The case for Texas Roadhouse
Texas Roadhouse operates a growing portfolio of casual dining brands, including its namesake steakhouse, Bubba’s 33, and Jaggers. The company differentiates itself through a focus on large portions, made-from-scratch food, and a lively atmosphere that targets families and value-conscious diners. As of late 2025, the company managed over 800 locations, primarily concentrated in the United States, where it has built a loyal following for its signature steaks and ribs.
For FY 2025, the company reported revenue of close to $5.9 billion, a healthy increase of approximately 9.4% over the prior year. Net income for the year was approximately $405.6 million, resulting in a net margin of 6.9%. This higher net margin relative to peers highlights the company’s ability to maintain profitability amid inflationary pressures in the food service industry.
As of the December 2025 balance sheet, the debt-to-equity ratio was approximately 1.3x, representing total debt relative to shareholder equity. The current ratio was roughly 0.5x, suggesting a lean approach to managing short-term assets relative to liabilities. During FY 2025, the company generated free cash flow of nearly $342.1 million, which it used to fund new restaurant openings and maintain its existing locations.
Risk profile comparison
Starbucks faces significant risks from its heavy concentration in North America, which accounted for roughly 74% of its FY 2025 revenue. The company is also navigating a changing labor landscape, as unions have gained representation at approximately 6% of its domestic stores. Furthermore, because it relies on premium arabica coffee, volatility in commodity prices can create sudden pressure on its net margin, especially when competing with value-oriented rivals like McDonald's (NYSE:MCD).
Texas Roadhouse deals with its own geographic risks, as it has a high concentration of stores in Texas and Florida. The company is particularly sensitive to the cost of beef, which experienced higher-than-normal inflation throughout 2025. Additionally, the steakhouse chain competes for labor and customers against large casual dining operators like Darden Restaurants (NYSE:DRI), making it vulnerable to rising wages and shifts in consumer discretionary spending.
Valuation comparison
Texas Roadhouse currently trades at a lower multiple of both sales and estimated earnings, making it the more affordable option based on traditional valuation metrics.
Forward P/E
39.9x
26.6x
29.5x
P/S ratio
2.9x
1.9x
Sector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Both Texas Roadhouse and Starbucks face considerable challenges in 2026, including soaring commodity prices and competition for labor. Also, consumers tend to watch their spending in times of economic uncertainty, which we are currently experiencing. But the two companies are taking very different paths this year. Texas Roadhouse is holding steady, and Starbucks is working toward a turnaround strategy. Which stock is more attractive today?
First off, aside from serving vastly different products, the two companies target different demographics. Texas Roadhouse’s casual dining locations appeal to value-conscious diners and have developed a loyal following. While other restaurants are struggling to bring in customers, it has maintained strong traffic. Its sales remain steady, and the company is still expanding. Rising food costs, beef in particular, have been a concern, though.
Starbucks targets a more affluent customer base. It is somewhat of a luxury product, but that doesn’t give it unlimited pricing power. It faces intense competition from a wide variety of other coffee chains and even restaurants like McDonald’s. It is also dealing with rising costs for its specialty coffee beans. Starbucks has struggled a bit but is attempting a “Back to Starbucks” turnaround by simplifying its menu, along with other initiatives.
Starbucks could generate strong returns if its recovery gains momentum, but I’d choose Texas Roadhouse because, in my mind, proven execution is better than a turnaround still in progress.
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Pamela Kock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks and Texas Roadhouse. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Starbucks vs. Texas Roadhouse: Which Consumer Stock Is a Better Buy in 2026?

Starbucks Corporation SBUX is placing greater emphasis on cost discipline as it works to convert stronger sales momentum into more durable earnings growth. In the second quarter of fiscal 2026, consolidated revenues rose 9% year over year to $9.5 billion, while global comparable sales increased 6.2%. Operating margin expanded 110 basis points to 9.4%, marking the company’s first consolidated margin expansion since the first quarter of fiscal 2024. SBUX’s fiscal second-quarter earnings per share (EPS) increased 22% year over year to 50 cents, marking its first year-over-year earnings growth in more than two years.
Starbucks’ consolidated margin improved in the fiscal second quarter, but cost pressure remained visible in North America. The segment’s operating margin contracted 170 basis points to 10.2%, reflecting Green Apron Service investments, higher product and distribution costs, tariffs, elevated coffee prices and legal accruals. These pressures were partially offset by progress on operating leverage and cost discipline, underscoring the role of efficiency efforts in supporting margin performance.
Starbucks remains on track with its $2 billion gross cost-savings plan through fiscal 2028, with savings expected across product and distribution costs, operating expenses and G&A. The company expects the near-term savings impact to show most clearly in G&A, with Back to Starbucks investments offsetting much of the realized savings across the P&L.
The pace of savings flow-through remains central to the company’s fiscal 2026 earnings trajectory. Starbucks expects slight year-over-year growth in consolidated operating margin for fiscal 2026, supported by sales leverage, cost-savings initiatives, easing coffee and tariff pressures in the back half of the year and the margin-accretive China JV structure.
With EPS returning to year-over-year growth in the fiscal second quarter and the savings program remaining on track through fiscal 2028, cost discipline is likely to remain a key lever for stronger profit conversion. Reflecting this improved setup, Starbucks raised its fiscal 2026 EPS guidance to $2.25-$2.45 from its prior $2.15-$2.40 range.
How It Stacks Up to Competitors
Dutch Bros Inc. BROS is managing cost pressure through operating leverage, more disciplined labor deployment and overhead efficiency rather than a formal multiyear savings program. The company improved company-operated labor costs by 120 basis points as a percentage of shop revenues in the first quarter of 2026, supported by better alignment of staffing with customer demand. Efficiency also showed up in corporate overhead, with adjusted SG&A improving 100 basis points as a percentage of revenues. BROS expects about 80 basis points of adjusted SG&A leverage for 2026, although higher coffee costs, food rollout expenses and increased occupancy costs tied to its build-to-suit lease strategy remain margin headwinds.
McDonald’s Corporation MCD, by comparison, is using scale, supply-chain discipline and ownership optimization to manage margin pressure. The company said its supply-chain teams, supplier partnerships and hedging strategies position it to navigate food, paper and energy inflation in 2026. MCD also acknowledged that U.S. company-operated margins were not acceptable and is reviewing both ownership mix and development returns, including dropping locations that no longer meet return thresholds.
Compared with BROS and MCD, Starbucks’ cost story is more structured and turnaround-driven. BROS is leaning on sales leverage and overhead efficiency, while MCD is using supply-chain scale, disciplined development and ownership optimization. Starbucks, meanwhile, has a defined $2 billion savings plan through fiscal 2028, making cost discipline a more explicit lever in its effort to convert stronger comps into faster EPS growth.
SBUX’s Price Performance, Valuation & Estimates
Shares of Starbucks have gained 5.1% in the past year against the industry’s 10.8% decline.
SBUX’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-sales (P/S) multiple of 3.21, below the industry’s average of 2.74.
SBUX’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share (EPS) implies a year-over-year increase of 12.7%. The EPS estimates for fiscal 2026 have increased in the past 30 days.
EPS Trend of SBUX Stock
Image Source: Zacks Investment Research
SBUX’s Zacks Rank
SBUX stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can Starbucks' $2 Billion Cost-Savings Plan Accelerate EPS Growth?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the State Street Consumer Discretionary Select Sector SPDR ETF (Symbol: XLY) where we have detected an approximate $252.7 million dollar outflow -- that's a 1.1% decrease week over week (from 196,006,504 to 193,806,504). Among the largest underlying components of XLY, in trading today Starbucks Corp. (Symbol: SBUX) is down about 0.1%, Hilton Worldwide Holdings Inc (Symbol: HLT) is up about 0.2%, and Royal Caribbean Group (Symbol: RCL) is up by about 0.2%. For a complete list of holdings, visit the XLY Holdings page » The chart below shows the one year price performance of XLY, versus its 200 day moving average:
Looking at the chart above, XLY's low point in its 52 week range is $104.81 per share, with $125.01 as the 52 week high point — that compares with a last trade of $115.79. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further XLY Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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