This Retailer Might Rise as a Top Stealth AI Play

As investors pile in (and now, rush out) of the red-hot semiconductor trade as the go-to way to play the AI revolution and the big AI compute inflection point that many might still underestimate if agentic AI really does live up to the hype by offering meaningful returns on all that AI-related CapEx, perhaps it’s time to think about some of the AI monetizers that could also win big, though perhaps not as massively as the hyperscalers.

When it comes to some of the more under-the-radar AI beneficiaries, I think it’s worth exploring the names beyond just the tech sector. Retail stands out as one of the industries that could be transformed for the better at the hands of AI. Indeed, retail margins are known to be quite thin, especially when it comes to the big-box retail plays with huge grocery exposure.

Walmart is the AI winner you probably haven’t considered

Either way, AI is a profound technology that might just allow the leaders in the space to utilize the technology most effectively to level up their operating margin profiles as well as their sales growth. Either way, Walmart (NASDAQ:WMT | WMT Price Prediction) is a rather stealthy AI play that I think the market is just starting to get to know. Make no mistake, shares of Walmart have been rewarded for their tech-savvy. They’ve not only made smart bets on cutting-edge tech over the years, but it’s translated to results.

It’s no longer that low-margin staple that investors only look to buy when they think the economy is headed for a nasty recession. Of course, I’d still expect Walmart stock to hold its own far better than the rest of the market if such a climate were to happen.

In any case, Walmart’s AI strategy is shaping up to be one of the most exciting in all of the retail space, perhaps second only to Amazon (NASDAQ:AMZN), which is also a hyperscaler that’s leading the CapEx spending race with $200 billion to be spent on its AI efforts this year. That magnitude of AI spend makes a statement, especially when you consider it’s some tens of billions more than many of its hyperscaler rivals.

Walmart’s prudent spend on AI is already starting to pay off

While Walmart isn’t spending such an obscene amount, it is betting big on physical AI (robotics in the warehouse) to unlock operating efficiency gains by way of automation. It’s also betting big on agentic AI that could help power a better, more convenient customer experience, and, with that, more sales.

Whether we’re talking about the Sparky AI shopping assistant and its potential to evolve into Walmart’s horse in the agentic shopping race, or the “walk out” tech at the local Sam’s Club that takes even more friction away from the purchase, I think Walmart has everything it takes to enter a new era of growth.

Indeed, the only thing that’s better than offering the best value to consumers (lower prices, higher quality private-label goods) is being able to offer it without all the friction at the till or digital checkout, and the opportunity to be had in grocery delivery. The rise of agentic commerce and physical AI tech at physical stores, I think, will make it as quick and easy as ever to get what one needs at the best price as quickly as possible.

The big question is how much more people will spend if they’re able to buy with less and less effort. Could it be we’re entering an era where a future version of Sparky knows what to buy before you do?

Time will tell. Either way, I think it’s becoming more apparent that Walmart is more of a tech-retail titan, given its relatively heightened 48.8 times trailing price-to-earnings (P/E) multiple. Also, like big tech titans, Walmart has been conducting layoffs, with the recent announcement that 1,000 jobs are going to be cut or relocated.