Walmart has successfully rejuvenated the artificial intelligence market. By implementing innovative AI strategies, the retail giant has managed to breathe new life into this sector. Their efforts have not only enhanced their own operations but have also set a new standard for the industry, demonstrating the transformative potential of AI technology.

Walmart is setting a significant example of how artificial intelligence can enhance company productivity during uncertain market conditions. Morgan Stanley analyst Simeon Gutman highlighted in a note that Walmart’s use of Generative AI has accelerated essential workflows and reduced costs, calling it one of the most compelling demonstrations of AI in retail. During a recent conference call following a strong quarterly performance, Walmart revealed that AI tools have significantly improved productivity and enriched its product catalog. CEO Doug McMillon mentioned that the company has utilized various large language models to create or enhance over 850 million data entries in its catalog, a task that would have required nearly 100 times the current workforce without AI.

Walmart’s comments come at a time when some leading AI stocks for 2024 have experienced volatility. Earlier this month, many popular AI stocks faced setbacks as investors worried about the long-term returns on AI investments. Concerns about a potential recession, the unwinding of the “carry trade,” and general profit-taking have also contributed to recent market instability. However, the sector has rebounded this week, with Nvidia and Super Micro Computer seeing gains of 19% and 25%, respectively. Microsoft is on track for a 3% increase, while Meta Platforms has risen 2% and is poised for three consecutive weeks of gains. Advanced Micro Devices has surged 11%.

Morgan Stanley’s Gutman considers Walmart to be the “retailer of the future” with a favorable risk/reward profile. He maintained an overweight rating and raised his price target from $75 to $82 per share, suggesting a 12% potential upside from Thursday’s closing price. He described the recent quarter as further validation of Walmart’s market share growth and higher-margin profit story.