{"id":64487,"date":"2026-07-09T06:38:18","date_gmt":"2026-07-09T10:38:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/starbucks-taps-ai-to-cut-software-costs-pepsico-beats-revenue-estimates\/64487\/"},"modified":"2026-07-09T06:38:18","modified_gmt":"2026-07-09T10:38:18","slug":"starbucks-taps-ai-to-cut-software-costs-pepsico-beats-revenue-estimates","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/starbucks-taps-ai-to-cut-software-costs-pepsico-beats-revenue-estimates\/64487\/","title":{"rendered":"Starbucks Taps AI to Cut Software Costs; PepsiCo Beats Revenue Estimates"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>PepsiCo (<a href=\"\/stock\/PEP\">PEP<\/a>)<\/strong> reported a <strong>second-quarter revenue beat of $24.18 billion<\/strong> (est. $23.95B) and <strong>Core EPS of $2.20<\/strong>, while maintaining its full-year organic revenue growth guidance of <strong>2% to 4%<\/strong>.<\/li>\n<li><strong>Starbucks (<a href=\"\/stock\/SBUX\">SBUX<\/a>)<\/strong> is developing <strong>in-house AI tools<\/strong> to replace existing software from <strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>)<\/strong> and <strong>IBM (<a href=\"\/stock\/IBM\">IBM<\/a>)<\/strong>, aiming to reduce its <strong>$400 million annual software spend<\/strong>.<\/li>\n<li><strong>Maritime insurance premiums<\/strong> for the <strong>Strait of Hormuz<\/strong> have surged toward <strong>3%\u20135% of vessel value<\/strong> following renewed hostilities and tanker attacks, significantly increasing costs for global energy transport.<\/li>\n<li><strong>Barclays<\/strong> raised its price target for <strong>Ford Motor (<a href=\"\/stock\/F\">F<\/a>)<\/strong> to <strong>$14 from $13<\/strong>, citing four consecutive quarters of improving warranty costs and a top ranking in initial quality studies.<\/li>\n<li><strong>Fitch Ratings<\/strong> characterized Germany\u2019s latest <strong>34-point reform package<\/strong> as a long-term positive for public finances, though it noted the measures fall short of being &quot;transformative&quot; for the stagnating economy.<\/li>\n<\/ul>\n<h2>PepsiCo Navigates Inflation with Q2 Revenue Beat<\/h2>\n<p><strong>PepsiCo (<a href=\"\/stock\/PEP\">PEP<\/a>)<\/strong> delivered a solid second-quarter performance on Thursday, posting <strong>net revenue of $24.18 billion<\/strong>, which surpassed the analyst consensus of <strong>$23.95 billion<\/strong>. The beverage and snack giant reported <strong>Core EPS of $2.20<\/strong>, narrowly missing some estimates of $2.21 but showing resilience despite &quot;tightening consumer budgets&quot; in North America.<\/p>\n<p>The company maintained its <strong>fiscal 2026 guidance<\/strong>, still expecting <strong>organic revenue growth of 2% to 4%<\/strong> and <strong>core constant currency EPS growth of 4% to 6%<\/strong>. CEO Ramon Laguarta noted that while inflationary pressures have moderated category performance in the U.S., demand remains strong for <strong>salty snacks<\/strong> and <strong>zero-sugar sodas<\/strong>.<\/p>\n<h2>Starbucks Pivots to In-House AI to Slash Vendor Fees<\/h2>\n<p>In a strategic shift to optimize its tech stack, <strong>Starbucks (<a href=\"\/stock\/SBUX\">SBUX<\/a>)<\/strong> is leveraging artificial intelligence to build internal alternatives to software currently provided by <strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>)<\/strong> and <strong>IBM (<a href=\"\/stock\/IBM\">IBM<\/a>)<\/strong>. The coffee chain spends roughly <strong>$400 million annually on software<\/strong> and is targeting a <strong>$30 million budget reduction<\/strong> for the current fiscal year.<\/p>\n<p>The initiative includes replacing a <a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a>-based inventory tracking system and an IBM maintenance management tool. This move follows the recent scrapping of an earlier AI inventory pilot and represents a broader effort by Chief Technology Officer Anand Varadarajan to cut <strong>$2 billion in costs<\/strong> across the enterprise.<\/p>\n<h2>Geopolitical Tensions Drive Up Hormuz Shipping Costs<\/h2>\n<p>The <strong>Strait of Hormuz<\/strong> is facing a fresh spike in maritime insurance costs as renewed hostilities between the U.S. and Iran threaten the critical energy chokepoint. War risk insurance rates have reportedly ticked higher to <strong>3% of vessel value<\/strong>, with some underwriters quoting as high as <strong>5%<\/strong> following attacks on tankers earlier this week.<\/p>\n<p>The escalation has prompted the <strong>International Maritime Organization (IMO)<\/strong> to advise caution, as the cost of a single large tanker&#39;s coverage can now range from <strong>$3 million to $8 million<\/strong>. These rising premiums are expected to keep global fuel prices volatile and add significant surcharges to maritime freight.<\/p>\n<h2>Analysts Turn Cautious-to-Optimistic on Ford and Germany<\/h2>\n<p><strong>Barclays<\/strong> analyst Dan Levy raised the price target for <strong>Ford Motor (<a href=\"\/stock\/F\">F<\/a>)<\/strong> to <strong>$14<\/strong>, reflecting optimism over the automaker&#39;s structural changes. Ford recently jumped to <strong>third place overall<\/strong> in J.D. Power\u2019s Initial Quality Study, a significant turnaround from its previous years of leading the industry in vehicle recalls.<\/p>\n<p>Meanwhile, <strong>Fitch Ratings<\/strong> provided a measured assessment of Germany\u2019s new economic reform package. While the agency views the <strong>\u20ac10 billion tax relief<\/strong> and labor market flexibility as positive steps for the country&#39;s <strong>AAA rating<\/strong> and long-term public finances, it cautioned that the measures may not be enough to shift the economy from stagnation to robust growth in the near term.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways PepsiCo (PEP) reported a second-quarter revenue beat of $24.18 billion (est. $23.95B) and Core EPS of $2.20, while 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