We recently published a list of 10 Best Retail Stocks To Invest In. In this article, we are going to take a look at where Walmart Inc. (NYSE:WMT) stands against the other best retail stocks to invest in.
What Does the Holiday Shopping Season Look Like?
On December 2, Lindsey Bell, Chief Strategist at 248 Ventures, appeared on CNBC to discuss the consumer and economy in the holiday shopping season and the impact of proposed tariffs and the strong dollar on earnings. She said that the economy will see a resilient consumer, economy, and marketplace this week and at the end of the year. Bell expressed optimism going into the end of the year and was of the view that there is opportunity in retail at the present after staying in the shadows as a forgotten area.
As consumers have shifted in how they spend money and what they spend it on over the last several years, the retail sector is starting to see a comeback to discretionary items. Although an opportunity exists, retailers can only avail of it if they have the right merchandise at the right price or offer the right experience for the consumer. This is because the consumer is still value-oriented and price-sensitive simultaneously.
Tariff Threats: Are They Real for Investors and Consumers?
Concerns are circulating in the retail industry about the potential effects of “tariff threats” on the economy. Bell was of the view that it is undoubtedly necessary to stay on top of the potential threats that the president-elect’s proposed tariffs might cause to the markets.
However, she took us back to Trump’s first term as a president and the tariff increases he made, that Joe Biden continued in his term, highlighting that there wasn’t a significant lasting inflationary impact to them. She explained how tariffs work, saying that they go up when put on and have an impact in the near term, but eventually subside over time. The markets saw that in 2018 and 2019, while real inflation came in 2021 and 2022 with the pandemic. She reiterated that although the tariffs are something we need to keep an eye on, the scenario is not something we need to worry about from a consumer perspective this holiday shopping season.
Although the tariffs may not pose threats to consumers, what do they mean for investors? With the dollar up by half a percent at the time of the interview, concerns are rising about the dollar’s possible strength going into the next earnings season and the possible impact on rates that these “tariff threats” might bring about.
Bell agreed that the dollar’s strength impacts the earnings season, as about 50% of the S&P 500 gets its revenues from overseas multinational companies. She said that the dollar’s strength can continue into the year ahead, but this is a relative game. It is important to consider the currency and the strength of the economy around the world, as a strong dollar does depict a strong economy here in the US.
A manager standing in a hypermarket, pointing out items available for wholesale.
Our Methodology
For this article, we used the Finviz stock screener to identify around 40 retail stocks and narrowed our list to 10 stocks with the highest number of hedge fund holders, as of fiscal Q3 2024. We sourced the hedge fund data from Insider Monkey’s database. The stocks are arranged in ascending order of the number of hedge funds that have stakes in them.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT) is an omnichannel retailer that operates retail and wholesale stores and clubs, e-commerce websites, and mobile applications. It offers an elaborate array of items, ranging from general merchandise and electronics to food, groceries, and more.
The company’s fiscal Q3 2025 earnings showed sales growing by 6.1% in constant currency and profit growing by 9.8%. E-commerce was one of the primary drivers of growth worldwide, up 27%. Other growth drivers included advertising and membership income, which grew by 28% and 22%, respectively. These trends allowed the company to grow profits faster than sales while simultaneously working to lower prices and invest in its associates.
The rapid growth from these newer businesses is allowing Walmart Inc. (NYSE:WMT) to strengthen its business model. It is continuing to gain market share in the US in both general merchandise and grocery. Further trends in the US in fiscal Q3 2024 saw growing in-store volumes, faster curbside pickup, and an increase in delivery sales. There was no like-for-like inflation in the US in fiscal Q3 2025. Walmart Inc. (NYSE:WMT) is becoming more convenient for its customers and members, and that is helping it drive growth.
Overall, WMT ranks 1st on our list of best retail stocks to invest in. While we acknowledge the potential of retail stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
