1. Walmart, Inc. (NYSE:WMT)
Number of Hedge Fund Holders as of Q2 2024: 95
Walmart, Inc. (NYSE:WMT) is a multinational, omnichannel retailer that operates a chain of discount department stores, grocery stores, and hypermarkets in the United States and 23 countries. Apart from retail and wholesale stores and clubs, it also operates e-commerce websites and mobile applications. Its operations are divided into three segments: Walmart International, Walmart US, and Sam’s Club. 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.
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. Its store and club businesses are growing, with pickup growing faster than both domains. Walmart (NYSE:WMT) is improving its speed and delivery accuracy, giving more options to customers through e-commerce progress. Its earnings for fiscal second quarter of 2025 show a 23% global membership income growth, with Sam’s Club US achieving a record high membership count. Advertising sales driven by marketplace sellers also grew by nearly 50%, all showing a strengthening in the company’s business for the future.
Walmart (NYSE:WMT) is experiencing a strong consumer overall. Its fiscal Q2 2025 results show increasing market share with higher unit volume and transaction counts across the US. The company’s food, health, general merchandise, and wellness sectors are improving. It claims that since consumers across all income levels look for one thing, value, its US marketplace sales grew by 32% for the quarter by resonating with consumers.
Walmart (NYSE:WMT) is finding tangible ways to employ generative AI to improve member, customer, and associate experience. It is leveraging large language models and data from others to build its own. For instance, the company has used generative AI to improve its product catalog. It has also introduced an AI-powered search on its app and site, offering customers more help through its new shopping assistant that provides ideas and advice.
Overall, WMT ranks first among the 7 best department store stocks to buy according to hedge funds. While we acknowledge the potential of cleaning materials 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 WMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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