‘Profound AI Opportunity’ for Walmart as it Takes on TikTok and Amazon

Walmart (WMT) is ramping up its transformation into an AI-powered retailer and is ready to challenge e-commerce giant Amazon (AMZN) and even social media site TikTok.

Exciting AI

Four-star TipRanks-rated analyst Oliver Chen of TD Cowen said he had been left “excited” after sitting down for a meeting with Walmart’s chief executive Doug McMillon.

He said AI was the next frontier for Walmart’s transformation with McMillon describing it as a “profound opportunity ahead” for the retailer. Chen said new innovations such as GenAI-powered shopping assistant Sparky were helping the retailer “re-imagine how customers discover and buy.”

McMillon told Chen that AI was re-shaping everything at the business from forecasting and inventory flow to how items are merchandised and presented online.

“The goal is to move beyond boxes into personalized, multimodal, social commerce experiences similar to TikTok,” Chen said. “We are also excited about internal AI-led advancements at Walmart such as Wally, which analyzes performance across products, channels and markets for buying merchants to more effectively diagnose stock performance.”

Convenient Speed

McMillon also emphasized that delivery speed and omnichannel convenience are where Walmart can beat rival Amazon. He also highlighted that customers across income cohorts are increasingly willing to pay express delivery premiums, even amid economic pressure.

It is rapidly improving last-mile logistics, enabling shorter routes from stores to shoppers and creating smaller fulfillment hubs.

“Speed is meeting convenience. Walmart is fiercely competing with Amazon on delivery and bricks and clicks,” Chen said.

He has a Buy rating and $115 price target on the stock.

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