Is Walmart a good long-term investment? Its buy-and-hold prospects explained

Is Walmart a good long-term investment? Its buy-and-hold prospects explained

Laura Rodini

Tue, August 4, 2026 at 5:43 PM GMT+3 5 min read

• WMT -0.82%
• ^GSPC +1.21%

For the past few years, it's been a great time to be Walmart (WMT).

Thanks to strong e-commerce growth, the high-margin Walmart Connect advertising business, and company-wide investments in artificial intelligence, the world's largest retailer has transformed itself from a brick-and-mortar chain into an omnichannel giant.

High-income shoppers in particular have helped Walmart recently, as executives have noted that during this inflationary period, even customers earning more than $100,000 are shopping at Walmart for its "Always Low Prices." This has resulted in market share gains, strong earnings growth, and helped drive WMT shares to an all-time high of $134.20 on May 19, 2026.

It's also been a great time to be a Walmart investor. WMT shares have increased roughly 463% over the past decade, significantly outpacing the S&P 500, and on February 3, 2026, the company crossed the historic $1 trillion valuation threshold.

In fact, if you had invested $10,000 in Walmart a decade ago, you would be sitting on roughly $55,200 today.

That leaves many investors wondering whether Walmart's remarkable run can continue.

The bull case for Walmart

Everybody knows that discount retailers typically do well during recessions: When budgets are tight, consumers stretch every dollar by seeking out lower prices and buying in bulk.

That's where Walmart really shines. It sells everyday essentials like groceries, cleaning supplies, and household products — things people cannot live without. As then-CFO John Rainey explained in 2025, "Wallets have been stretched. If they get stretched further, people are still going to look for value. They're still going to want to eat. Food is the largest thing that we sell."

During the pandemic, for instance, Walmart kept pace with changing consumer demand by expanding its pickup and delivery services. This generated exceptionally strong cash flow for the company, allowing Walmart to continue investing in important new technologies.

Even in 2026, groceries account for roughly 60% of Walmart's business, which gives the company a stable stream of customer traffic — and recurring revenue.

Related: Walmart's stock buybacks: How its massive new repurchase program could affect shareholder returns

Walmart's sheer scale gives it another major competitive advantage. Nearly 280 million people shop Walmart stores and websites every week, which is a customer base few others can rival. This gives Walmart tremendous purchasing power with its suppliers and helps keep its prices low.

Most of all, through both bull and bear markets, Walmart has consistently rewarded its shareholders by returning capital through share buybacks and increasing dividends.

This demonstrates the type of financial discipline that many buy-and-hold investors value — and could also help position it well in the future.

Why WMT investors should be cautious

Although Walmart generates massive revenue — $713.6 billion in 2025 alone — its margins remain surprisingly thin. Historically, the Bentonville-based behemoth has operated with net margins of just 2.5% to 3% because it keeps prices low through a high-volume/low-markup business model.

Operating a business of Walmart's scale is expensive, and selling groceries, employing millions of workers, and running one of the world's largest logistics networks leaves relatively little room for error. In fact, Walmart's operating expenses totaled nearly $683.4 billion last year. And those "Always Low Prices?" They give the retailer little room to raise prices when supply constraints arise, because its customers will simply seek value elsewhere.

Related: How many employees does Walmart have in 2026? Its workforce, locations & layoffs explained

Investors should also consider valuation. As the stock reaches record highs, it has been trading at a price-to-earnings (P/E) ratio near 39x–41x, which is well above its 10-year median of roughly 28x–30x. Walmart has historically traded like a mature retailer, but in recent years, the market has rewarded it like a growth company, so its future returns could depend on investors' willingness to pay a premium.

But right now, Walmart's financial profile — and its earnings growth — has been completely reshaped by one transformative factor: technology.

Walmart's unique AI advantage

Walmart actually began to integrate artificial intelligence into its operations as early as 2017, with the launch of its tech incubator, "Store No. 8." The project was spearheaded by Jet.com founder and Walmart's then-CEO of e-commerce, Marc Lore, as a way to test and scale artificial intelligence. The incubator's Intelligent Retail Lab, for instance, was housed in a busy New York supermarket and used AI-enabled cameras and sensors and computer vision to track operations.

Around the same time, the retailer also established its AI Center of Excellence to optimize its backend operations, including warehouse automation.

Rather than treating AI as a standalone initiative, Walmart has been gradually embedding the technology throughout its operations, and its impact is beginning to show up in the company's financial performance.

During the company's February 2026 earnings call, Walmart reported $713 billion in revenue for the full fiscal year, a nearly 5% year-over-year increase. For a retailer operating on razor-thin margins, even a modest increase in revenue can lead to significant earnings growth if the business also becomes more efficient — and that's exactly what AI is helping Walmart do.

Management has credited AI-powered tools with improving customer engagement, noting that customers who used its Sparky AI assistant had average order values that were 35% higher, while automation is helping to optimize its supply chain and inventory management, as well as speed up delivery times.

"The way we're using technology and AI is helping us create great customer solutions, reduce friction, simplify decision-making and pinpoint where our inventory is — all while maintaining the trust we've earned from our customers and members." CEO John Furner explained.

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In other words, Walmart no longer looks like "just a retailer." Increasingly, it looks like a technology-enabled platform that happens to sell groceries.

In fact, Walmart isn't even listed on the New York Stock Exchange anymore. The company moved to the Nasdaq in December 2025 — a symbolic shift that reflects Walmart's evolution into a tech-forward business.

So for long-term investors, Walmart may offer something relatively rare: Exposure to artificial intelligence without the volatility that comes with owning a technology stock.

Related: History of Walmart: Company timeline & facts

This story was originally published by TheStreet on Aug 4, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.