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Walmart Inc's (NYSE:WMT) next profit engine isn't on its store shelves — it's in its servers. JPMorgan analyst Christopher Horvers believes the retail giant's growing use of artificial intelligence, including a new partnership with OpenAI’s ChatGPT, could transform Walmart into one of the most powerful retail advertising platforms in the U.S.
As AI begins to predict what shoppers want before they even search, advertisers are lining up to get in on the data-driven gold rush.
According to Horvers, Walmart's U.S. advertising business, currently generating around $3.5 billion in annual revenue, is growing at more than 20% per year. With its Walmart Connect platform and the integration of newly acquired Vizio, Horvers estimates the company could add roughly $5 billion in incremental operating profit — a major boost to the enterprise's $31 billion base.
The key lies in AI. Walmart's "Sparky" recommendation engine is now powering personalized product suggestions, while "Marty," a business-facing agent, helps advertisers optimize campaigns.
Together, they're turning Walmart's vast consumer footprint — 150 million weekly visits — into a high-ROI digital media network.
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Walmart's latest move is a partnership with OpenAI that allows users to make purchases directly through ChatGPT. While the feature is still nascent, Horvers says it gives Walmart access to valuable consumer intent data while keeping it in the loop of AI-driven commerce.
Rather than cannibalizing ad revenue, the integration could enhance it — as sponsored products become more likely to surface in conversational AI searches.
Walmart's advertising business is emerging as a high-margin growth story hidden inside a low-margin retailer. With AI engines sharpening its data edge and ChatGPT bringing shoppers even closer to purchase intent, Walmart is positioning itself as the tech-savvy retailer to watch.
For investors, this is less about cheap groceries — and more about premium ad profits.
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Posted In: WMT
