Kamal Ghorui
Walmart reached a market capitalization of over $1 trillion on Tuesday (February 3). This makes the American company the first retailer in the world to join an exclusive club of companies to reach a 13-figure valuation that mostly consists of technology companies like Google, Nvidia, Amazon, Microsoft and Meta. The company has been riding on a year-long rally that has seen its shares rise nearly 26%. The retail giant reached the $1 trillion mark only about two weeks after it moved from the New York Stock Exchange (NYSE) to the Nasdaq-100. The trillion-dollar tag also comes only two days after new CEO John Furner took over for longtime CEO Doug McMillon. Walmart’s ascent has been notable as it has managed to tap into a mix of appealing simultaneously to higher-income customers seeking value and convenience and retaining its core base of lower-income shoppersWalmart bet early and aggressively on AI, pouring billions into supply-chain automation to stock fresher produce, speed up deliveries and improve inventory forecasting and search. In just the past five years, the retailer has reportedly expanded its online marketplace to over half a billion items, launched one-hour delivery, created Walmart+ to rival Amazon Prime, and built a $4+ billion advertising business that boosted margins. “They’ve gone from just being the local retailer for good prices to really embracing technology. It’s been a massive digital business transformation that this company has gone through over the last five years,” Eric Clark, chief investment officer at Accuvest Global Advisors, to Reuters.
Walmart is the ‘new AI giant’ on the bloc
Walmart has been lately positioning itself as a leader in AI commerce, announcing a partnership with Google in January this year to allow customers to purchase products using the tech giant’s Gemini chatbot. Analysts are terming Walmart as “the new AI giant”. Google and Walmart’s announcement is said to be a key indicator of how AI is reshaping commerce. In January, Google CEO Sundar Pichai and then-incoming Walmart US CEO Furner announced a partnership resulting in shoppers now able to shop Walmart and Sam’s Club products directly on Gemini, Google AI chatbot. The announcement was made at the National Retail Federation’s Big Show. At the event Walmart CEO made it clear that he is willing to make changes to how retail operates and fully embrace AI’s potential. He said, “What won’t change … is our purpose, our values, the way we think about people leading.” Furner added, “But everything else we are willing to change — what we sell, how we interact with customers, with our associates.”The Google partnership means that Gemini users are able to discover Walmart items when doing research on the chatbot, which will automatically offer product recommendations from the retailer where and when relevant. If users decide that they want to purchase the product being recommended in the conversation, they can do so instantly, with Walmart’s checkout environment appearing.Brian Mulberry, senior client portfolio manager at Zacks Investment Management, told Reuters that the way Walmart is weaving technology (including AI) into its operations, from cutting the cost of goods to capturing a larger share of consumer spending it is the emerging ‘new AI giant’. Joining the AI race with Amazon, Walmart has been growing investments in AI. This has helped the retailer close the gap with online behemoth Amazon, which had a head start with its chatbot, Rufus, a GenAI-powered assistant that answers shopping queries.
