Target Accelerates Growth With AI-Driven Operational Transformation

Target Corporation TGT is accelerating its technological transformation through the strategic use of artificial intelligence to enhance efficiency, forecasting accuracy and guest experience. In the second quarter of fiscal 2025, the company deployed more than 10,000 new AI licenses, marking a significant step in its plan to modernize processes and enhance efficiency. 

This initiative is part of Target’s Enterprise Acceleration Office, a company-wide program focused on eliminating bottlenecks, upgrading outdated systems and improving organizational speed and agility.

AI is already improving operational performance by automating manual tasks such as demand forecasting and inventory planning. These innovations allow teams to generate more precise forecasts, maintain stronger in-stock levels and reduce time spent on repetitive work. As a result, Target achieved its best on-shelf availability in years, reinforcing the ability to meet customer expectations both in stores and online.

Technology investment remains a core pillar of Target’s growth strategy. Alongside AI, the company continues to upgrade its store infrastructure, digital capabilities and supply-chain systems, supported by approximately $4 billion in annual capital expenditures. Together, these efforts support the company’s “stores as fulfillment hubs” model, blending physical and digital channels into a seamless omnichannel experience.

AI also supports profitability by strengthening high-margin digital initiatives such as Roundel, Target Plus and membership programs, all of which delivered double-digit growth in the fiscal second quarter. The integration of data-driven insights enables better merchandising and pricing decisions that enhance guest satisfaction and drive higher returns.

Through these technology advancements, Target is positioning itself for sustained growth, improved efficiency and long-term competitiveness in a rapidly evolving retail landscape.

WMT and BBY Focus on Digital Growth as TGT Embraces AI

Walmart Inc. WMT is rapidly advancing its digital operations through robust e-commerce growth, AI-driven innovations and faster fulfillment. In the second quarter of 2026, global e-commerce sales increased 25% year over year, with Walmart U.S. posting a 26% rise and nearly one-third of store deliveries arriving within three hours. AI tools, such as Sparky, boost personalization, while revenues from marketplace, advertising and memberships continue to expand Walmart’s digital ecosystem.

Best Buy Co., Inc. BBY is strengthening its digital ecosystem with the launch of a new online marketplace. The platform is tripling Best Buy’s product assortment in categories like mobile accessories and gaming. The platform uses AI-powered search to enhance product discovery and personalization. Combined with seamless store integration, seller support and growing advertising capabilities, Best Buy is positioning itself as a leading digital-first retailer.

Target’s Price Performance, Valuation & Estimates

Target stock has lost 36.7% year to date against the industry’s growth of 2.1%. 

Its forward 12-month price-to-earnings ratio of 10.84 reflects a lower valuation than the industry’s average of 29.48. TGT carries a Value Score of A. 

The Zacks Consensus Estimate for TGT’s fiscal 2025 earnings implies a year-over-year decline of 16.3%, while the same for fiscal 2026 indicates growth of 9.1%. Earnings estimates for fiscal 2025 and 2026 have been southbound by 3 cents per share each in the past 30 days.

Target 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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