Walmart figured out AI before Target, and investors are paying attention
As investors continue to crowd into Big Tech names riding the artificial-intelligence boom, one portfolio manager argues that the next phase of tech investing may look less like Silicon Valley and more like big-box retail, with Walmart (WMT) increasingly fitting the profile of a technology company.
In a recent interview with Phil Rosen on the Full Signal podcast, Nancy Tengler, a top-1% portfolio manager and registered investment adviser, stated that Walmart’s long-term strategy reflects a deliberate effort to be viewed as a tech-enabled business rather than a traditional retailer.
“That’s management communicating what we’ve been talking about for the last three years,” Tengler said. “They want to be seen as a technology company that happens to be in retail. That is how you scale retail.”
Walmart, $WMT, is set to rally in 2026 as the market starts to reprice it as a tech and AI play instead of a retailer.
undefined Phil Rosen (@philrosenn) December 16, 2025
That's according to Nancy Tengler (@ntengler), a top 1% portfolio manager over the last 11 years.
Here's her thesis on the stock. pic.twitter.com/PZE6IrFGF6
Walmart has been investing aggressively in automation and logistics. More than 60% of its U.S. store inventory now receives at least some freight from automated distribution centers, according to the company’s third-quarter earnings report.
Over half of its U.S. e-commerce volume is processed through automated systems, helping drive lower fulfillment and shipping costs.
Those investments are showing up in the financials. Total revenue rose 5.8% year over year in the third quarter to $179.5 billion.
Growth has been even faster internationally, where net sales climbed 11.4% on a constant-currency basis, Walmart said, as the company scales digital platforms and supply-chain capabilities outside the U.S.
Even Sam’s Club — Walmart’s membership-based warehouse chain — has leaned further into digitization, with increased use of mobile ordering, curbside pickup, and automated fulfillment.
Against this backdrop of accelerating automation and digital expansion, Walmart raised its fiscal outlook into 2028, reinforcing management’s view that technology will drive the company’s next stage of growth.
That technology-first approach is also creating a widening gap between Walmart and one of its closest competitors.
Walmart is pulling away from Target
Walmart’s embrace of automation has been years in the making and is closely tied to its partnership with Symbotic, a robotics and artificial intelligence company that designs automated warehouse systems used to streamline inventory management and order fulfillment at distribution centers.
While Target (TGT) also worked with Symbotic, the outcomes have diverged sharply. According to Tengler, Target chose not to fully deploy Symbotic’s software capabilities across its network.
“Target did not avail themselves of the software,” Tengler said, noting that Walmart moved more aggressively to integrate the technology into its operations.
“The difference between the performance in those two stocks, and I think the future of those two companies, is tied to the fact that Walmart got in early, got ahead, and I don’t know that Target can ever catch up,” Tengler said.
The market divergence reflects that assessment. Walmart shares are up nearly 28% this year, hitting record highs, while Target stock has fallen roughly 28%, as investors weigh slower sales growth and weaker margins against Walmart’s increasingly tech-driven execution.