Walmart: a new member of the elite club

SP500

Key zone: 6,850 - 6,900

Buy: 6,900 (on strong positive fundamentals); target 7,050-7,150; StopLoss 6,830

Sell: 6,800(on a pullback after retesting 6,850); target 6,650; StopLoss 6,860

Walmart’s market capitalization has crossed the $1 trillion mark thanks to a radical change in strategy. Previously, only Berkshire Hathaway had managed to achieve this while not being a high-tech company.

The largest American retailer began operating like an IT business, investing in digital advertising and AI projects. It is now a tech-powered network and an omnichannel platform. And a 26% increase in its stock over the year confirms the effectiveness of this policy.

• Walmart made an early and aggressive bet on artificial intelligence and carried out a large-scale digital transformation of its business.
• The company entered into partnerships with OpenAI and Google to integrate its online shopping tools directly into search chatbots, thereby strengthening its position in using AI to optimize the entire process – from product search to checkout.
• Walmart managed to combine attracting high-income customers seeking good prices and convenience with retaining its core base of low-income customers.
• Over the past five years, the retailer has expanded its online marketplace to more than half a billion products, launched one-hour delivery, created Walmart+, competing with Amazon Prime, and built an advertising business with revenue exceeding $4 billion.

Now the main task is to maintain these positions; for this, management needs to raise operating margin above 6% – such results have not been seen in the company since 2015. Apparently, investors have given the company an “advance of trust” and have already priced in profits from AI implementation and advertising revenues, where margins reach 60–80%.

However, this advance may be “eaten up” by a global economic crisis and problems in the US labor market. American households, especially those with low and middle incomes, are already experiencing growing financial pressure due to persistent inflation and slowing labor market growth.

But there is hope that the old methods of the gurus of American retail will remain effective: when consumers save money, they go to Walmart – this tradition has lasted for several generations.

Today the US stock market is again trying to rise: the S&P 500 is moving up in premarket trading. The S&P 500 index tested local support at 6885 but is ready to return to the 6900–7000 range. Nasdaq 100 futures have returned to growth after two days of active sell-offs in the technology sector. Buyers began to buy the dip amid оценки fresh corporate earnings.

Walmart is an excellent example of successful investment in a single company rather than in global indices – the company has been outperforming the S&P 500 for almost two years. The retailer is becoming a universal defensive asset that does not depend on unstable US governments, speculation in energy markets, or foreign political cataclysms.

So we act wisely and avoid unnecessary risks.

Profits to y’all!