Walmart’s Innovative AI-Driven Search Tool Prompts Buy Rating

In a report released today, Corey Tarlowe from Jefferies reiterated a Buy rating on Walmart (WMT – Research Report), with a price target of $70.00.

Corey Tarlowe has given his Buy rating due to a combination of factors, primarily centered around Walmart’s innovative use of generative AI in enhancing its search capabilities. This new feature, which is designed to improve customer experience by allowing for broader and more intuitive shopping across various categories, has been tested by Tarlowe and his team, and the results have been largely positive. Despite some room for improvement, the AI-enabled search tool has shown to offer highly relevant and applicable results, with the majority of the top search outcomes aligning well with the user’s intent. The deployment of such cutting-edge technology positions Walmart favorably in the competitive retail landscape, indicating potential for increased customer engagement and market share growth.

Furthermore, the AI search functionality creates a more solution-oriented shopping experience, which could potentially drive traffic and conversion rates. Tarlowe’s analysis suggests that the incorporation of consumer-facing generative AI tools, like this search feature, may lead to sustained traffic increases for Walmart. Although there were some inconsistencies with sponsored results and the availability of the “Generated by AI” search, these are seen as opportunities for Walmart to refine its offering and enhance sales. Overall, the proactive approach in leveraging AI technology for consumer benefit supports the optimistic outlook for Walmart’s stock.

Tarlowe covers the Consumer Cyclical sector, focusing on stocks such as Costco, Murphy USA, and Abercrombie Fitch. According to TipRanks, Tarlowe has an average return of 14.5% and a 64.81% success rate on recommended stocks.

In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $67.00 price target.

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Walmart (WMT) Company Description:

Walmart, Inc. boasts retail and wholesale businesses. It offers an assortment of merchandise and services at everyday low prices through its stores, Walmart.com and mobile apps. The company conducts its operations through three business segments: Walmart U.S., Walmart International, and Sam’s Club (membership-only warehouse clubs and samsclubs.com). The company was founded by Samuel Moore Walton and James Lawrence Walton in 1945 and is headquartered in Bentonville, AR.