Milestone! Walmart hits USD 1 trillion market cap, but what is the new CEO’s ‘critical challenge’ in AI era?

Walmart hits USD 1 trillion market cap: Walmart reached a market capitalisation of USD 1 trillion on Tuesday, February 3. This makes the US company the first retailer in the world to join the club of technology companies like NVIDIA and Alphabet, Reuters reported.The company has been riding on a year-long rally that has seen its shares rise nearly 26 per cent.The trillion-dollar tag comes two days after John Furner took over for longtime CEO Doug McMillon. However, according to the report, Furner is facing the critical challenge of boosting the company's technology investments in an AI-driven era while fending off competition from rivals Amazon, Aldi and Costco.According to Reuters, Walmart's ascent has been notable as it has managed to tap into a mix of appealing simultaneously to higher-income customers seeking value and convenience and retaining its core base of lower-income shoppers. The stock has surged 468 per cent over the past decade, outpacing the S&P 500's 264 per cent gain, in part due to that dual strategy, which competitors have struggled to replicate.Online Market ExpansionIn the past five years, the retailer has expanded its online marketplace to over half a billion items, launched one-hour delivery, created Walmart+ to rival Amazon Prime, and built a $4-billion advertising business that boosted margins, the report said.Critically, Walmart bet early and aggressively on AI, pouring billions into supply-chain automation to stock fresher produce, speed up deliveries and improve inventory forecasting and search, giving the Bentonville, Arkansas-based retailer an operational edge that has helped it beat US same-store sales estimates for 15 consecutive quarters, based on estimates compiled by LSEG, the Reuters report added.Investor optimism around Walmart's AI investments has further fueled the stock's rise as consumers increasingly shift grocery shopping online.With every USD 1 in USD 4 spent on groceries in the US going to Walmart, the retailer finds itself in a sweet spot in a challenging consumer environment where low- and middle-income households face strain from inflation, a cooling job market, tariffs, and uncertainty from the recent US government shutdown, all of which have made the retailer's every day low price strategy more compelling, according to the report."It really is a remarkable accomplishment. We think of trillion-dollar market caps as being a tech-stock phenomenon, but Walmart is a gritty 'old-economy' company," Charles Sizemore, a Walmart investor, was quoted as saying by Reuters.Google Partners Walmart To Enable Shopping Within Gemini AI ChatbotEarlier, last month, Google announced that it will be adding more shopping functions to its AI-powered chatbot by partnering with giant retail shops such as Walmart, Shopify, and other major players in the retail sector to transform its Gemini app into a virtual retailer and assistant.It will facilitate users to proceed with payments within a Gemini chat after discovering products from some businesses and many payment providers without closing the Google Gemini chat.(With inputs from PTI)