SBUX Stock Set For Best Day In Two Months — Starbucks Steps Up AI Push To Cut Reliance On MSFT, IBM

Starbucks is building its own artificial intelligence tools to replace software it currently buys from tech giants such as Microsoft and IBM as part of a sweeping $2-billion cost-reduction initiative.

• Starbucks is using AI-assisted coding to develop in-house software, aiming to replace its Microsoft inventory-tracking system and IBM maintenance-management tool. 
• The coffee giant spends around $400 million annually on software and hopes this digital pivot will significantly trim expenses amid a larger $2-billion corporate turnaround plan. 
• Starbucks’ global store growth has dropped to the lowest on record. 

Starbucks (SBUX) shares gained about 3% on Thursday as the coffee chain is turning to AI to build its own business applications, aiming to reduce its reliance on legacy technology providers such as Microsoft and IBM.

The SBUX stock was on track to end its best day in over two months on Thursday. The coffee chain is developing alternatives to a Microsoft inventory tracking system and an IBM maintenance management tool, according to an internal presentation reviewed by Bloomberg News. A rollout of some of this proprietary software could occur by the end of next year.

Developing Internal Tech Stack Getting Cheaper?

For decades, large corporations remained tied to major tech vendors due to the steep costs and immense operational risks associated with building business software from scratch. However, the rapid evolution of generative AI and AI-assisted programming is reshaping that landscape, making it significantly easier and cheaper for companies to build specialized tools internally.

Starbucks has actively pushed its engineering workforce to integrate artificial intelligence into their daily tasks, even linking AI utilization directly to employee performance bonuses. According to the internal communications reviewed by Bloomberg, AI-assisted coding was instrumental in designing the new platform meant to replace the IBM maintenance tool.

AI Spends Come At A Time Of Slowing Store Growth 

The technology overhaul coincides with a massive turnaround effort at Starbucks, which is aiming to trim $2 billion in total corporate costs as per the internal memo. 

The company's enterprise technology division is currently on pace to reduce its budget by $30 million for the fiscal year ending in late September. This includes a $10 million reduction in direct software procurement and another $13 million saved primarily by scaling back external professional service contractors in favor of internal staff. 

The restructuring also comes from slowing global store growth for Starbucks which currently sits at its lowest level on record. 

SBUX Stock: Retail View 

Retail sentiment on Stocktwits was ‘bullish’ with ‘high’ message volumes. Retail chatter on SBUX stock has jumped 312% in the past session and more than 500% over the past week. 

SBUX stock has gained 26% year-to-date. 

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