• Markets: Like your friend who bet on the Dodgers, stocks had a rough week. The Nasdaq had its worst week since June, as investors shunned AI stocks and oil prices rose to $110 per barrel yesterday. Chip stocks took a hit, as did CoreWeave, whose debt kicked off concerns about AI financing this week, after getting a brief boost the day before.

LIQUID ASSETS

Niv Bavarsky

After 40 years of offering PepsiCo products at its US restaurants, fast-food chicken chain KFC said Thursday that it’s making the switch to Coca-Cola starting in January. The finger lickin’ goodbye is a loss for Pepsi in the long-fought Cola Wars, but KFC thinks the move will help get the restaurant’s gravy train rolling again (or at least the mashed potato train).

So, why did Kentucky Fried Chicken cross the road? Consumers, especially younger ones, have been increasingly thirsty for innovative and customizable beverages, like refreshers and dirty sodas. KFC believes Coke products will help it “innovate, meet changing tastes, and give customers more reasons to choose us,” KFC US President Catherine Tan-Gillespie told employees and franchisees in a letter obtained by CNBC.

KFC needs a leg up. Colonel Sanders and company have been losing ground to other chicken chains for years, dropping from No. 1 in US sales in 2012 to fifth overall in 2026, per research firm Technomic.

Pepsi might need some Pepcid

Getting expelled from the land of 11 herbs and spices is sure to be a source of heartburn for Pepsi, which was already in a tough place:

• The company’s stock is down double digits in the past year.
• Healthier habits and GLP-1 drugs have dinged its salty snack business in North America.
• Coke has about 44% of the US carbonated soda market, compared to ~26% for Pepsi, per Circana.

Winner, winner, chicken dinner: This isn’t the first time that Coke has convinced a Pepsi client to switch to the red team, having recently poached Culver’s, Arby’s, Panda Express, Marriott hotels, and the Costco food court. But Pepsi hasn’t sat by. It stole Subway from Coke, officially becoming its supplier last year.

But the KFC–Pepsi divorce stings a little bit more, since the two had become such an iconic pairing, like thighs and drumsticks. Pepsi owned KFC for more than a decade after scooping up the chain in 1986. Pepsi later spun off its restaurant businesses, including Taco Bell and Pizza Hut, in 1997 into a company that later became Yum! Brands.

Silver lining for the blue: Pepsi will continue to supply multiple overseas markets for KFC’s massive international business.—BC

      

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