1. Walmart Inc (NYSE:WMT)
Number of Hedge Fund Holders: 95
Walmart (NYSE:WMT) is an American multinational retail corporation that operates a chain of discount department stores, grocery stores, and hypermarkets in the United States and 23 countries. It has over 10,500 stores worldwide and employed around 2.1 million associates globally at the end of FY2024. 1.6 million of these associates were concentrated in the US.
Despite other retailers experiencing reduced consumer interaction and growth, Walmart (NYSE:WMT) is experiencing a strong consumer overall. Its latest earnings show increasing market share, with higher unit volume and transaction counts across the US. General merchandise, food, and health and wellness sectors continue to improve. The company claims that since consumers across all income levels look for one thing, value, its US marketplace sales grew by 32% for the quarter.
Walmart’s (NYSE:WMT) widespread presence, wide assortment of items, and convenience give it a competitive advantage in the industry. Customers have a lot to choose from, and a large number of stores to go to. In addition, it is improving its pickup and delivery services, offering even more convenience and increasing its e-commerce sales by 21% overall. Membership income for the company also grew by 23% globally.
Walmart (NYSE:WMT) is also working to streamline its operations in the long run. It is automating its supply chain and working towards tangible ways to leverage generative AI to enhance its customer, member, and associate experience. For reference, it integrated generative AI to improve its product catalog, which affects everything from helping customers find and purchase their items of choice to delivering orders and storing inventory.
Walmart’s (NYSE:WMT) sheer size also strengthens its industry presence. To put its size into perspective, Walmart (NYSE:WMT) operates around 10,600 stores around the world, with more than 50% of them located outside the United States in 23 other countries. Target (NYSE:TGT), in contrast, has around 2,000 stores, while Kroger (NYSE:KR) has 2,750. Walmart (NYSE:WMT) is also attempting to expand its customer base and appeal to the higher-income class by introducing high-end brands, such as premium wines and Chaps and Reebok in the apparel lines.
As of Q2 2024, 95 hedge funds held stakes worth 9.19 billion in the stock. It sports a consensus Buy rating from analysts, with its median price target presenting an upside of 4.88% from current levels.
WMT ranks first among the 10 best discount retailer stocks to buy. While we acknowledge the potential of discount retailer stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the stocks that are mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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