Analyst Explains Why He's Bullish on Starbucks (SBUX), Says CEO Brian Niccol's Plan is Working

We recently published 10 Stocks Moving on Buzzing News as Analyst Issues Strong Warning About AI Valuations. Starbucks Corporation (NASDAQ:SBUX) is one of the stocks moving on buzzing news.

Theotrade‬’s Don Kaufman said in a recent program on Schwab Network that he is bullish on Starbucks. Here is why:

“I’m bullish on this one, which is rare for me. I was bearish for a significant time on Starbucks Corp (NASDAQ:SBUX), but I finally feel like the expenditures are pretty much done. I think his (Brian Niccol’s) plan is starting to actually take hold over there. There’s been a pretty incredible run from 79 to 83, and there’s no reason to think that run isn’t going to continue. So I’m going out to the December 19th expiration on this one. I’m going to give myself the gift of time and let this thing take hold. Like everybody knows, it’s pumpkin spice latte season. I’m going to buy the 90 calls and sell the 95 calls—a $5-wide call spread done for an 85-cent debit. It’s a wonderful risk-reward. There’s no stop order needed. You throw 85 cents at risk, and let’s see if this plan actually plays out and the stock heads back to 95 to 100.”

Polen Global Growth Strategy stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its second quarter 2025 investor letter:

“We have reestablished our position in Starbucks Corporation (NASDAQ:SBUX), now under the leadership of newly appointed CEO Brian Niccol, formerly of Chipotle. Niccol has articulated a clear, multi-pronged turnaround plan that we view as both practical and achievable. We believe Starbucks’ store operations became overly complex, resulting in over-tasked baristas and a poor customer experience. Having successfully revitalized Chipotle, we view Niccol as the right leader for Starbucks. He has already identified fixes for in-store operations, marketing, and customer service that we believe can potentially result in meaningful impact in the not-too-distant future, provided they are effectively scaled across 17,000 U.S. stores. We believe Starbucks retains an aspirational brand and a loyal customer base. As such, we see solid growth ahead through store productivity, new-store growth, and significant margin expansion. After a few years of mismanagement and a languishing stock, we expect considerable upside for this iconic brand.”

While we acknowledge the potential of SBUX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.