How OpenAI deal can make Walmart a trillion dollar market cap company

Investing.com -- Walmart’s newly announced partnership with OpenAI could be the catalyst that pushes the retailer toward a trillion-dollar market capitalization, according to analysts at Mizuho Securities.

Analyst David Bellinger calls the integration of ChatGPT’s “Instant Checkout” feature a “major step forward in the adoption and broader acceleration of agentic commerce,” arguing that Walmart is positioning itself ahead of peers as AI begins to reshape online purchasing behavior.

The partnership will allow customers to complete transactions directly through ChatGPT, with Walmart highlighting the “proactive” and “predictive” nature of AI-powered shopping.

Bellinger notes that while many consumer-facing companies have been slow to adapt or have even taken steps to block AI web crawlers, Walmart is leaning in and allocating capital and talent to accelerate its AI strategy.

The analyst said Mizuho’s deep-dive work on agentic AI suggests that AI agents acting autonomously on behalf of consumers could unlock the next leg of e-commerce growth.

“We therefore view WMT as much more advanced than any other consumer-related name and our preferred agentic AI play,” he wrote, pointing to the recruitment of former Instacart executive Daniel Danker to lead customer-facing AI initiatives.

Fresh food is not yet included in the first rollout, but Bellinger expects the feature set to expand across categories.

Walmart’s current market cap stands just over $814 billion, and Mizuho argues that today’s announcement “should push WMT shares closer to our bull case scenario which, in turn, could make WMT one of the few, elite trillion dollar market cap companies in existence.”

Their bull case assumes mid-single-digit comparable sales growth, faster scaling of advertising, membership and marketplace revenues, and EBIT margins rising well above 5%, supporting a valuation multiple north of 40x earnings.

In its base case, Mizuho applies a 36x multiple to forward earnings with a price target of $115, already a premium to peers.

Bellinger says a decade-long investment cycle is now reaching a tipping point, with earnings leverage improving as higher-margin digital businesses accelerate.

With AI agents potentially increasing order frequency and retention in core categories such as consumables and grocery, the analyst sees multiple ways for Walmart to gain further scale and improve profitability.

“WMT is clearly ahead of the curve here, while others have been slow to adapt or even made efforts to block AI web crawlers,” he said.