Target Corporation TGT is expanding its digital capabilities through agentic commerce as AI-enabled services increasingly influence how consumers search and shop. The retailer has established partnerships with OpenAI, Google Gemini and other leading platforms to explore new ways of connecting with shoppers and capitalize on this emerging trend. These initiatives form part of Target's broader technology strategy, which emphasizes personalized shopping experiences and stronger customer engagement.
Early traffic trends are encouraging. In the second quarter of fiscal 2026, Target reported that digital traffic originating from external AI platforms was growing at more than 3.5 times the industry rate compared with a year earlier. Although this traffic remains relatively small, the faster growth suggests that AI-powered shopping platforms are emerging as another avenue for customer discovery.
Target is also strengthening its internal AI capabilities. It is focusing on developing technology that enhances shopping experiences and unlocks new business capabilities. Investments in personalization remain another priority, allowing the retailer to deliver more relevant experiences across stores and digital channels while strengthening customer engagement.
These initiatives complement Target's expanding digital operations. Comparable digital sales increased 8.7% year over year in the quarter, aided by more than 25% growth in same-day delivery. While these gains cannot be directly attributed to agentic commerce, they highlight Target's expanding digital presence.
Well, Target's early initiatives could broaden customer reach and create additional opportunities for digital engagement as AI-assisted shopping adoption increases.
Walmart and BJ’s Wholesale Leverage AI Shopping Assistants
Walmart Inc. WMT is using AI to make digital shopping more personalized and convenient. Walmart said usage of its AI-powered Sparky assistant increased 70% year over year, while customers using Sparky spend 40% more per order. Walmart also highlighted Sparky’s ability to build meal plans, recommend products and recognize prior purchases across stores and online, helping shoppers avoid duplicate purchases and simplifying product discovery.
BJ’s Wholesale Club Holdings, Inc. BJ is also deepening digital engagement through AI-enabled shopping support. BJ’s Wholesale said its AI-powered assistant, Bev, has handled more than 100,000 member conversations, helping shoppers find products, check club hours and better use their memberships. BJ’s Wholesale is pairing this capability with broader digital convenience, as digitally enabled comparable sales rose 30% in the second quarter of fiscal 2026 and digitally engaged members demonstrated stronger spending and loyalty.
How Does Target Stack Up Against Its Industry?
Target has seen its shares rally 9.8% over the past three months compared with the industry’s rise of 0.9%.
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What Does Target’s Current Valuation Suggest?
From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 15.62, lower than the industry’s 27.95. However, the stock is trading above its 12-month median level of 14.95.
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What Do Earnings Estimates Signal for Target?
The Zacks Consensus Estimate for Target’s current fiscal-year sales and earnings per share implies year-over-year growth of 5.1% and 37.8%, respectively. For the next fiscal year, the consensus estimate indicates a 3.1% rise in sales but a decline of 9.5% in earnings per share.
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Target’s Investment Case
Target's expanding agentic commerce initiatives, AI-driven personalization, and partnerships with leading technology platforms strengthen its growth potential. Encouraging trends in AI-driven traffic, coupled with strong digital sales performance, highlight emerging opportunities to expand customer reach. Ongoing investments in technology and shopping convenience position Target to benefit from shifting consumer shopping preferences. These factors support a constructive investment view on this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Target Corporation (TGT): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).