Analyst Sees Billions in Walmart's Next Big Advertising Opportunity

Walmart Inc. (NYSE:WMT) could unlock billions of dollars in advertising revenue as it expands its digital advertising business, strengthens its connected TV presence and integrates artificial intelligence into shopping, according to Bank of America. Bank of America analyst Christopher Nardone maintained a Buy rating on Walmart with a $126 price forecast on Monday. Advertising Business Gains Momentum Following a meeting with Walmart Connect executive Ryan Mayward, Nardone highlighted the retailer’s growing ability to attract advertising dollars from competing platforms. Walmart’s access to roughly 150 million weekly shoppers gives advertisers valuable consumer insights and helps the company measure advertising effectiveness. Meanwhile, Walmart continues to add tens of thousands of third-party marketplace sellers, creating another source of advertising revenue. Bank of America estimates that marketplace sellers typically spend 10% to 12% of gross merchandise value on advertising, compared with 4% to 6% for traditional Walmart suppliers. Connected TV Opens Multibillion-Dollar Opportunity The analyst also highlighted Walmart’s acquisitions of Vizio in December 2024 and Vibe.co in August 2026. These deals expand Walmart’s reach beyond brands selling products through its stores and marketplace. Vibe’s self-service platform allows small and midsize businesses to launch and measure streaming TV campaigns using Walmart’s consumer data. Nardone believes these advertisers could represent a multibillion-dollar opportunity over the longer term. Walmart’s investment in Vizio’s WatchFree+ streaming service also provides additional advertising inventory. See More: Top Value Stocks AI Shopping and Sam’s Club Offer More Growth Bank of America sees Walmart as a potential beneficiary of AI-powered shopping because of its integrations with multiple AI platforms. The retailer operates its own AI shopping assistant, Sparky, and has partnered with external platforms, including Meta Platforms, Inc.’s (NASDAQ:META) Muse. However, the analyst cautioned that it remains too early to determine how AI shopping agents will reshape advertising. Meanwhile, Walmart is moving Sam’s Club’s U.S. advertising operations onto Walmart’s technology platform. The integration could encourage brands to increase advertising spending across Walmart, Sam’s Club and international markets. Valuation and Risks Bank of America’s $126 price forecast reflects 40 times its fiscal 2028 adjusted earnings estimate, above Walmart’s average forward earnings multiple of 36 over the past two years. The premium reflects expectations for continued market share gains, stronger store traffic and operating income growth approaching twice the pace of sales growth. However, the firm identified slowing food inflation, tougher competition and weaker global retail conditions as potential risks to its outlook. Walmart Price Action WMT Price Action: Walmart shares were down 0.05% at $118.74 at the time of publication on Monday, according to Benzinga Pro data. Image via Shutterstock Read Also: Elon Musk Has a Pattern, Says Analyst Who Predicted SpaceX Spectrum Deal