Starbucks Stock Goes ‘Nuts’ as AI Push Targets Microsoft, IBM and Oracle

• Starbucks stock gained after reports that the company is building AI-powered software to replace tools from Microsoft, IBM, and Oracle
• IBM, Salesforce, and ServiceNow shares slipped as investors weighed the long-term impact of companies developing software in-house
• The move caused a major debate over whether generative AI could reshape the enterprise software industry and reduce reliance on traditional vendors

Starbucks stock (SBUX) registered dainty gains after reports that the coffee giant is developing its own AI-powered software to replace some of the technology it currently buys from outside vendors. Investors welcomed the potential cost savings, but the market’s reaction stretched far beyond Starbucks. Shares of IBM, Salesforce, and ServiceNow moved lower as traders began asking if AI will eventually reduce enterprise software spending across corporate America.

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Starbucks Stock Rises as AI Cost-Cutting Plans Take Shape

Starbucks’s stock, wit the SBUX ticker surged by about 2.5%, closing at $106.41. This rise came after news about the company building internal AI tools that could replace parts of Microsoft’s inventory management software and IBM’s maintenance platform surfaced.

According to the report, Starbucks also plans to replace Oracle’s Simphony point-of-sale system over time. The initiative is part of a broader effort to trim $2 billion in costs. Chief Technology Officer Anand Varadarajan previously told employees the company spends roughly $400 million a year on software and sees “clear opportunities” to bring that figure down.

Reports also revealed that Starbucks’ enterprise technology team expects to cut around $30 million from its budget this fiscal year. This includes roughly $10 million in software expenses.

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While Starbucks stock gained, enterprise software names headed in the opposite direction. Before the opening bell, IBM fell over 2%, and Salesforce dropped nearly 3%. ServiceNow just started recovery.

The move suggested investors weren’t reacting only to Starbucks. Instead, they were considering what would happen if more large companies used generative AI to build internal software instead of paying for third-party applications. This idea also caught the attention of CNBC’s Jim Cramer, who said the development was “brutal” for software providers. He argued that once companies realize their own AI tools can replace expensive enterprise programs, others may follow the same path.

AI Could Reshape Enterprise Software Spending

At present, Starbucks is only one example, and replacing business-critical software could take years, not months. Still, the announcement shows how generative AI is moving beyond chatbots into core business operations.

The global AI market is expected to exceed $800 billion by 2030, according to Grand View Research, as companies have been investing in automation and productivity tools. As more businesses evaluate where AI can replace existing software, investors may begin looking beyond quarterly earnings and toward which companies benefit and which ones risk losing customers.

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