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LivestreamMenuCoffee has become one of the best trades in the market lately, outpacing even artificial intelligence. Coffee futures are up 13% over the past three months, beating the VanEck Semiconductor ETF (SMH) — one of the big beneficiaries of AI — which is up just 2.2%. The Roundhill Memory ETF (DRAM) is little changed over the same time. Coffee has even outpaced the broader market by a factor of three, with the S & P 500 advancing 4.1% since mid-May. The commodity’s strong performance comes despite record levels of production, as demand shows no signs of slowing. Weather is also playing a key role in its recent surge. @KC.1 3M mountain Coffee 3-mo chart “Looking into 1H27, arabica coffee prices have rebounded, up ~30% since June, and this week’s earthquake in Colombia has introduced new uncertainty as a road carrying a significant portion of the country’s exports was disrupted,” wrote Jefferies analyst Kaumil Gajrawala in a note. Research organization Climate Central also pointed out earlier this year that “extreme weather in global coffee-growing regions has likely contributed to coffee price spikes in recent years.” And while trading the commodity directly can be difficult-to-impossible for most small investors, there are some publicly-traded companies that analysts expect will outperform. HSBC upgraded Keurig Dr Pepper , the maker of K-Cup pods and owner of Green Mountain Coffee Roasters and Peet’s, to buy from hold. Its price target of $40, up from $37, implies upside of more than 35%. “Strong trends in refreshment beverages and improving outlook for U.S. Coffee into 2H26 are encouraging,” wrote analyst Sorabh Daga. Shares are flat over the past three months and are up 5.5% in 2026. Another stock investors should keep an eye on is Starbucks . The coffee chain has soared 29% year to date and is ahead 2.4% over the past three months. Frank Cappelleri, founder of CappThesis and a CNBC contributor, wrote Wednesday that a breakout in the stock is brewing. If Starbucks breaks out and begins moving toward his $125 target, “it also would be pushing through the top of this longer-term, multiyear range,” he said. “At that point, momentum could accelerate further, opening the door for the stock to challenge its all-time highs and potentially continue higher from there, much like we’ve seen following prior multi-year breakouts,” Cappelleri said.Read More
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