Image Source: Mike Mozart, Flickr
 

The stock has been holding steady since April, while other S&P 500 leaders have made gains as markets gained new confidence in the outlook for US trade. But August’s tariff deadline is finally upon us, and the retailer may be well-positioned for growth as consumers look to protect against the threat of inflation. 

Discount retailer stocks have become a mainstay in diversified portfolios, with Walmart drawing investor attention as a stable stock and steady payer of dividends. 

President Trump’s launch of reciprocal tariffs on August 1 has hit 92 nations with new trading levies, with Canada’s 35% tariff a particular cause for concern among analysts worried about the inflationary implications from higher import costs. 

Although there’s likely to be plenty more developments for the tariff outlook in the United States, the higher costs of importing goods are expected to be passed on to consumers, causing higher price inflation. 

Should inflation begin to tick upward as a result of tariffs, Walmart will be at the top of investor priority lists as a defensive stock that attracts more traffic among price-conscious consumers. 
 

Growth Focused

Walmart may be well-known as a defensive stock, but the store has also gained a positive reputation for its focus on growth and its deployment of artificial intelligence within its operations. 

Not only did the first quarter of fiscal 2026 show top-line growth of 2.5% for Walmart and a 1.7% boost to adjusted earnings, but Walmart also demonstrated growth in the company’s club store, highlighting that consumers had already begun to flock to the retailer amid the wider uncertain economic landscape. 

Walmart is a strong option for investors when it comes to challenging economic conditions because of its enviable physical store base, consisting of 4,600 locations within the United States, which are accessible to 90% of the country’s population. 

The stock’s economic moat is further solidified by its reputation as a renowned discount retailer, while the deployment of its dedicated Walmart+ subscription service serves as a game-changer for customer retention.

We can also see evidence of Walmart out-innovating its challenges. In June, the retailer opened its first owned and operated case-ready beef facility in Kansas in response to rising beef prices within its supply chain. 

The 300,000-square-foot facility is sourcing Angus cuts directly from Sustainable Beef LLC to 600 stores in the Midwest in a bid to keep costs competitive for consumers. 
 

AI Adoption

Walmart has been referred to as the ‘Nvidia of retail’ by Scott Mushkin, founder and CEO of R5 Capital, as the retailer continually seeks to utilize artificial intelligence to improve its operational efficiency. 

In recent days, the firm unveiled plans to roll out a suite of AI ‘super agents’ in a bid to enhance the shopping experience for customers while streamlining its operations. 

Deploying four agents powered by agentic AI, Walmart plans to enhance the point of contact for shoppers, employees, suppliers, sellers, and software developers alike. 

The agents will become the first point of contact for every AI interaction with Walmart, and the company is targeting its e-commerce business to account for 50% of its total sales within five years, powered by innovations in artificial intelligence. 

Many customers have already come into contact with Sparky, a generative AI agent that’s accessible on Walmart’s app, which is expected to become a fully-fledged ‘superagent’ in the months ahead. 
 

Valuing Walmart

Despite the stock maintaining a ‘Moderate Buy’ consensus rating from 32 brokerages, analysts have raised concerns surrounding cuts to store support and training roles, as well as recent instances of insider selling. 

It’s also important to note that Walmart is in no way immune to tariff price hikes, which risks undermining the store’s position as a discount retailer. 

However, the stock will likely be a popular safe haven or diversification option should the impact of reciprocal tariffs lead to an uptick in inflation. 

“At a price-to-earnings (P/E) ratio of 42.1%, it’s clear that many investors are already flocking to Walmart as a defensive option to protect against economic uncertainty,” explained Steve Frauzel, Head of Market Insights at global brokerage brand Just2Trade. “As a dividend-paying stock, it’s unlikely that the retailer will fall out of favor with cautious investors, but the stock is already trading close to its fair value of around $100. 

“Despite this, if Walmart continues to thrive amid an increasingly uncertain economic backdrop thanks to its proactive AI adoption strategy, the stock could easily see 20% upside. The outcome of US trade negotiations may prove to be the most significant catalyst for growth in this regard.” 
 

What’s Next? 

Walmart remains one of the most popular defensive stocks for investors, and the recent return of tariff uncertainty will likely push the stock to the forefront of investment strategies throughout the country and beyond. 

With a credible innovation pipeline and an exceptional network of stores nationwide, Walmart promises to offer a high degree of resilience for traders, but President Trump’s bold but fickle outlook for tariffs means that investors should always keep their ear to the ground and stay receptive to the changing economic landscape.

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