Will AI-Driven Tools Improve Home Depot's In-Store Edge?

The Home Depot, Inc. HD is betting big on artificial intelligence, which is becoming an essential part of its toolkit. The goal is to enhance its in-store competitiveness by providing its employees with improved digital tools. These tools, which leverage the company's extensive internal data and knowledge base, are designed to give store employees instant access to operational and product information through their HD Phones. This new technology is an evolution of existing tools, such as the "Pocket Guide" application.

Associates can now deliver more accurate guidance with greater speed, particularly on complex projects or during peak seasons like spring. For a retailer built on in-store expertise and hands-on problem solving, these AI tools reinforce Home Depot’s value proposition in ways e-commerce alone can’t replicate. This focus on empowering employees is already paying off, with the company reporting record retention rates, stronger engagement and improved customer satisfaction.

In today’s home improvement market, both DIY and Pro customers demand not only value but also tailored advice. AI tools help sharpen that edge, transforming the role of the associate into a more informed and efficient guide. With a footprint of more than 2,300 stores and a massive workforce, even small gains in efficiency and accuracy can result in measurable improvements in sales performance.

By combining AI advancements with ongoing employee training, Home Depot is repositioning its stores as intelligent service centers, where tech-enabled human expertise remains at the core of the customer experience.

How Do LOW & FND Keep Pace With Home Depot?

Lowe’s Companies Inc. LOW is stepping up its AI and tech investments to strengthen its in-store edge, much like Home Depot. Lowe’s is leveraging AI-driven tools to improve associate productivity, enhance job site delivery and optimize customer interactions across channels. Lowe’s integration of AI with partners like NVIDIA and Palantir is already enhancing search and recommendation engines. By embedding advanced technology into everyday operations, Lowe’s is positioning itself as a smart, tech-enabled competitor in home improvement retail.

Floor & Decor Holdings, Inc. FND is doubling down on digital and in-store initiatives to strengthen its competitive edge. Floor & Decor is expanding design services and connected customer capabilities, which now drive 19% of sales, supported by rising online engagement and higher average ticket sizes. Floor & Decor’s investment in store openings, enhanced assortments and personalized design consultations underscores its strategy to deliver a seamless, high-touch shopping experience across channels.

What the Latest Metrics Say About Home Depot

Home Depot shares have risen 12.5% in the past year compared with the industry’s growth of 6.9%.
 

From a valuation standpoint, Home Depot trades at a forward price-to-earnings ratio of 24.48X, higher than the industry’s 21.58X. HD carries a Value Score of C.
 

The Zacks Consensus Estimate for Home Depot’s current financial-year sales implies year-over-year growth of 3.1%, while earnings per share suggest a decline of 1.3%.
 

Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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