Is Chewy Inc.'s (CHWY) AI Upside Enough to Justify Further Gains?

Chewy, Inc. (NYSE:CHWY) is among the stocks under $50 to buy now. On January 13, Morgan Stanley increased the price target on Chewy, Inc. (NYSE:CHWY) to $51 from $48 and maintained an ‘Overweight’ rating. The firm believes that, for the internet space, this year will be “thematically similar” to the previous year, as the market will favour companies that report significantly positive Return on Invested Capital (ROIC) from GenAI or GPU-enabled technologies.

On the other hand, on January 6, Wolfe Research trimmed the price target on Chewy, Inc. (NYSE:CHWY) to $44 from $46, keeping an ‘Outperform’ rating, according to TheFly. The firm believes that although 2026 will be a successful year for Internet companies, the outperformance will still lag the previous three years’ performance. This is due to the ongoing stretched multiples for some companies. The prospects for upside ahead are supported by AI-related developments, solid capital allocation, and targeted re-rating opportunities.

Overall, Chewy, Inc. (NYSE:CHWY) has a ‘Buy’ rating from 69% of the analysts covering the stock, while the remaining 31% recommend a Hold, as of January 21. With a consensus 1-year median price target of $46, the stock boasts an upside potential of 41.84%.

Chewy, Inc. (NYSE:CHWY) is a Florida-based company providing pet food, pet medications, and other pet-health products, as well as pet services. Incorporated in 2010, the company offers its products through its retail websites and mobile applications.

While we acknowledge the potential of CHWY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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