Should You Buy Walmart Stock? This Dow Jones Stock Could Offer Better Value for 2025
Sunday, Dec 8, 2024 5:12 am ET
Walmart Inc. (WMT), a retail giant and Dow Jones component, has seen its stock price surge in recent years, with a 100% increase since 2022. However, several risks and challenges could impact its investment value in the coming years. This article explores the potential of Walmart stock for 2025, considering its strategic investments, market position, and valuation.
Walmart's strategic investments in technology, such as AI and automation, are crucial for driving its long-term growth and profitability. The company is leveraging AI to improve efficiency and customer experience, with internal use of AI helping to keep its expense base stable. Walmart is also investing in automation in its supply chain and generative AI tools to enhance the customer experience and efficiency at its fulfillment centers. These investments are expected to contribute to Walmart's earnings growth, which is projected to be 9% annually over the next several years.

Walmart's expansion into new markets and product categories could significantly impact its stock performance in 2025. The company's aggressive growth strategy, including its acquisition of a majority stake in the Indian e-commerce platform Flipkart and its expansion into Africa through a partnership with Shoprite, positions Walmart to tap into high-growth emerging markets. Additionally, Walmart's expansion into new product categories, such as healthcare services and financial services, could drive revenue growth and enhance its competitive position in the retail sector.
Walmart's cost-cutting measures and operational efficiency improvements have been instrumental in driving its stock performance. In 2024, the company reported a 5.5% increase in revenue, exceeding analyst expectations by $1.4 billion. This growth can be attributed to strategic actions such as price cuts and more efficient inventory management. Walmart's free cash flow also rose by $1.9 billion year-over-year, reaching $6.2 billion. These improvements have contributed to a 107.6% return in the past three years, significantly outperforming the broader market. As Walmart continues to optimize its operations and deliver strong financial results, investors can expect the company's stock to maintain its momentum in 2025.

Walmart's strategic partnerships and acquisitions have significantly contributed to its stock performance in recent years. In 2024, Walmart's stock price has surged by 107.6%, outpacing the broader market. The company's e-commerce segment, bolstered by strategic investments and partnerships, has been a key driver of this growth. Walmart's acquisition of Flipkart in 2018 and its partnership with Shopify have expanded its online presence and allowed it to compete more effectively with Amazon. Additionally, Walmart's investment in automation and AI technologies has improved operational efficiency and enhanced the customer experience. As Walmart continues to invest in these areas and form strategic partnerships, it is well-positioned to maintain its strong stock performance in 2025.
In conclusion, Walmart's strategic investments in technology, expansion into new markets and product categories, cost-cutting measures, and strategic partnerships position the company to offer better value for 2025. However, investors should monitor the company's execution of these expansion strategies and the competitive landscape in these new markets to assess its long-term prospects. While Walmart faces challenges such as intense competition from e-commerce giants like Amazon and Costco, its strong brand, extensive retail network, and e-commerce initiatives position it well to maintain its competitive edge. Investors should consider these factors and the company's valuation when evaluating Walmart as a long-term investment opportunity.