We recently published a list of 15 Most Crowded Hedge Fund Stocks That Are Targeted by Short Sellers. In this article, we are going to take a look at where Starbucks Corporation (NASDAQ:SBUX) stands against other most crowded hedge fund stocks that are targeted by short sellers.

Hedge funds piling into a stock is a signal of conviction. After all, if institutional investors are backing a company, there has to be a good reason for it, right?

Things get interesting when the same stock ends up with a high short interest. Where some investors back the company to become successful, others bet on its downfall. This contradiction is often eagerly tracked by investors, as it can potentially lead to explosive moves to either side.

Consider, for instance, a scenario where a stock with a high short interest and a high hedge fund holding starts going up. As everyone rushes to buy more of the already popular stock, short sellers rush to close their positions, triggering a strong bull rally.

We decided to shortlist stocks that were the most likely candidates for such a rally. To come up with our list of 15 most crowded hedge fund stocks that are targeted by short sellers, we only considered stocks with a market cap of at least $1 billion and a short interest of at least 3%. We then ranked these stocks by the number of hedge funds that have the stock in their portfolio.Is Starbucks Corporation (SBUX) The Most Crowded Hedge Fund Stock That is Targeted by Short Sellers?

A barista pouring freshly brewed coffee from an espresso machine to a cup in a bustling cafe.

Starbucks Corporation (NASDAQ:SBUX)

Number of Hedge Fund Holders: 84

Short Interest:  3.15%

Starbucks Corporation (NASDAQ:SBUX) is a marketer, roaster, and retailer of coffee. It operates in the International, North America, and Channel Development segments. The company’s stores provide tea, coffee, single-serve products, roasted whole beans and ground coffees, and different food products.

As per the recent earnings report, the firm fell short of expectations. Due to a 2% drop in comparable transactions, global comparable store sales went down by 1%. However, the firm managed to improve its consolidated net revenue by 2.3%. Despite missing targets, Starbucks (NASDAQ:SBUX) saw a slight turnaround under the new CEO, Brian Niccol.

CEO Brian Niccol pointed out the turnaround:

“My optimism has turned into confidence that our Back to Starbucks plan is the right strategy to turn the business around and to unlock opportunities ahead. Improving transaction comp in a tough consumer environment at our scale is a testament to the power of our brand and partners getting ‘Back to Starbucks.’ We are on track, and if anything, I see more opportunity than I imagined.”

Story Continues

Heading into 2025, management remains confident in its Back to Starbucks strategy to grow and stabilize the business. However, the company did not disclose the detailed financial outlook for upcoming quarters. Recovery and international expansion are major priorities, with 8 out of the top 10 markets indicating improvement in sales. Moreover, the company plans to enhance operational efficiency.

Overall, SBUX ranks 7th on our list of most crowded hedge fund stocks that are targeted by short sellers. 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 doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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

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