We recently published a list of the 11 Best Coffee Stocks to Buy Now. In this article, we are going to take a look at where Starbucks Corporation (NASDAQ:SBUX) stands against the other best coffee stocks to buy now.
Overview of the Coffee Sector
According to the US National Coffee Association, the number of Americans who had coffee the past day rose by 37% between 2004 and 2024, placing past-day coffee consumption at its highest level in over two decades. Americans are thus increasingly consuming coffee, and its popularity is showing no signs of waning. Modern consumers have made coffee an integral part of their lives, as the National Coffee Association reported that around 66% of Americans now consume coffee daily. This number surpassed tap water consumption in 2021.
According to a report by Mordor Intelligence, the US coffee market is valued at $29.10 billion as of 2025. It is expected to grow at a compound annual growth rate (CAGR) of 3.69% between 2025 and 2030, reaching $34.87 billion at the end of the forecast period. Grand View Research shows that the global coffee market has a size of $223.78 billion as of 2023, and is expected to grow at a CAGR of 5.4% between 2024 and 2030.
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Specialty and Instant Coffee Trends In the US
The establishment of specialty coffee cafes and sophisticated coffee houses across urban centers is boosting the demand for coffee. The coffee market is experiencing a strong premiumization trend, as consumers are exhibiting an increasing inclination to invest in high-quality, premium coffee experiences. Statistics from the National Coffee Association show that 43% of American coffee drinkers prefer and choose specialty coffee, which reflects a notable 20% increase compared to January 2021. According to Grand View Research, the US specialty coffee market is valued at $47.8 billion as of 2024. It is expected to grow at a CAGR of 9.5% between 2025 and 2030.
Instant coffee is another significant factor in the coffee industry, as it is one of the primary drivers of the rise of coffee drinkers. According to Fortune Business Insights, the instant coffee market in the US was valued at $5.78 billion as of 2022. It is anticipated to grow at a CAGR of 4.28% between 2023 and 2030, reaching $8.06 billion at the end of the forecast period.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 coffee stocks. We then selected the top 11 with the highest number of hedge fund holders, as of Q4 2024, and ranked them in ascending order. We sourced the hedge fund sentiment data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a freshly roasted coffee bean, accompanied by a vintage aluminum scoop.
Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 84
Starbucks Corporation (NASDAQ:SBUX) produces, markets, and retails specialty coffee. It operates through the following segments: North America, International, and Channel Development. The company recently experienced a growth slowdown amidst worsening global economic conditions, but the stock is showing resilience.
On March 18, Investment firm Argus upgraded Starbucks Corporation (NASDAQ:SBUX) to a Buy from Hold with a $115 price target, categorizing its recent stock decline as a buying opportunity. The firm believes investor fears surrounding slowing same-store sales in the restaurant industry due to economic concerns are overblown. The analyst told investors in a research note that he expects Starbucks Corporation (NASDAQ:SBUX) to benefit from its focus on brand marketing, digital improvements, and a reduction in its sales promotions. Argus also believes that store remodeling and menu simplification are likely to raise same-store sales and boost company customer traffic.
Invesco Growth and Income Fund also expressed bullish sentiments for Starbucks Corporation (NASDAQ:SBUX) in its Q3 2024 investor letter, stating the following:
“Starbucks Corporation (NASDAQ:SBUX): The coffee retailer has struggled with China’s economic softness, declining sales and weaker US store traffic that have hampered revenues and profit margins. However, we believe the company has several positive, long-term catalysts, including strong growth in store count, better labor relations, improving productivity from labor, technology and innovation, and easier future earnings comparisons. We believed a management change was imminent, and shortly after we purchased the stock, Starbucks named a new CEO, which was seemingly greeted enthusiastically by investors.”
Overall, SBUX ranks 1st on our list of the best coffee stocks to buy now. While we acknowledge the potential of SBUX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBUX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
