News Flash! Walmart Stock Is an AI Pick for Defensive Investors. – InvestorPlace

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Most investors probably think of Walmart (NYSE:WMT) as a famous big-box retail store chain. Yet, I encourage you to think of Walmart differently in 2024. You can buy Walmart stock because you like to buy defensive names and collect dividends, but don’t overlook the company’s artificial intelligence connections.

That’s right: I’m proposing that WMT stock is a technology stock as much as a defensive/dividend stock. When you discover how Walmart is getting involved in AI, you’ll surely rethink this old retail giant and grab a few shares for your portfolio.

Walmart Ventures Into AI-Powered Logistics

There are plenty of reasons to invest in Walmart today. Maybe you like to collect passive income; if so, you’ll surely be interested to know that Walmart recently hiked its annual dividend by 9%.

Or, perhaps you like to invest in growth stocks. On that topic, Walmart’s same-store sales increased 4% year-over-year in 2023’s fourth quarter, beating the analysts’ consensus estimate of 3.12%. Walmart stock hit a record closing high price of $61.45 not long ago.

Now, I’ll add another reason to invest in Walmart: it’s actually an AI-tech company. In fact, the company’s Walmart Commerce Technologies division recently introduced an AI-powered logistics-technology product called Route Optimization.

To put it simply, Route Optimization is Walmart’s proprietary route-planning software for shipping businesses.

According to the Business Wire news release, Route Optimization uses “AI-driven software to optimize driving routes, pack trailers efficiently and minimize miles traveled.” This software reportedly enabled Walmart to eliminate “30 million unnecessary miles driven” and “bypass 110,000 inefficient paths.”

Walmart Teams Up With an AI Leader

Even beyond Route Optimization, Walmart is implementing AI technology. For example, the company’s executives claim that Walmart’s AI-powered search bar is driving an “increasingly significant” number of searches on the company’s app.

Certainly, Walmart’s executives know that the company could use some help in developing AI technology. That’s why Walmart is turning to an AI leader, Microsoft (NASDAQ:MSFT). As you probably know by now, Microsoft has added AI functionalities to its Edge browser and Bing search engine.

As Barron’s reported, Walmart has teamed up with Microsoft to “develop proprietary AI technology.” That’s a smart move, and it should benefit Walmart’s bottom line in the long run.

Specifically, Jefferies analyst Corey Tarlowe anticipates that “AI and automation can help Walmart generate about $20 billion in incremental earnings before interest and taxes by fiscal 2029.”

Walmart Stock: Plenty of Reasons to Invest Today

So, what’s your favorite reason to invest in Walmart? Is it the dividend payments, or is it Walmart’s comparable-store sales growth? Or, maybe you like to buy momentum stocks, and WMT stock is definitely moving in the right direction.

On top of all that, Walmart has a Microsoft partnership to develop AI technology. That’s a development you might have have expected.

Yet, it shows that even an old company like Walmart can venture into new, future-forward areas. Therefore, if you’re looking for a high-confidence AI investment, feel free to add Walmart stock to your portfolio.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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