Goldman Sachs Group Inc (NYSE:GS, ETR:GOS) analysts have highlighted potential benefits for Walmart Inc (NYSE:WMT, ETR:WMT) following the retailer’s recent partnership with OpenAI, which allows customers to complete purchases directly within ChatGPT.
The analysts note that Walmart has been accelerating its AI initiatives over the past year, including the August hiring of Daniel Danker as executive vice president of AI acceleration, product, and design, tasked with driving AI transformation across the company.
“Management explained Walmart made the decision not to build a large language model (LLM) and is instead leveraging the hyperscalers in the AI space,” they wrote, adding that the company does not anticipate changes in capital expenditures as a result of the partnership.
Goldman’s team highlighted Walmart’s four primary use cases for agent-based shopping, being replenishment, mission-based shopping, single-item solutions, and inspiration and discovery.
According to the analysts, ChatGPT will become "an extension of Walmart’s customer acquisition model.”
They also pointed to the potential for downstream benefits, noting that incremental traffic and larger basket sizes could boost Walmart+ subscriptions.
“While Walmart did not quantify any kind of lift from this partnership, we would note there are currently 800 million users of ChatGPT,” the analysts wrote. “Walmart can now help these users to solve problems and offer its broad assortment, low prices, and fast delivery speed.”
The firm added that as Walmart shares affirmation data with ChatGPT, “the experience and the level of personalization should continue to improve over time and drive incremental sales from existing customers.”
The analysts also highlighted Walmart’s existing AI capabilities, including Sparky, a generative AI shopping assistant, and back-end tools like Wally, which helps optimize inventory and merchandise performance.
They cited prior initiatives, such as Trend-to-Product, a GenAI tool that accelerated the launch of Walmart’s first AI-assisted apparel collection by 18 weeks, noting strong sell-throughs.
Goldman Sachs maintains a 'Buy' rating on Walmart with a 12-month price target of $114.
Walmart shares traded hands at about $107 on Friday, up almost 19% in the year to date.