Walmart Shares Rise on AI Partnership and Major Drone Expansion
The retail giant is partnering with Google's Gemini for AI-powered shopping and is launching the largest drone delivery network in the U.S., signaling a major tech-fueled push against Amazon.
Walmart Inc. (WMT) shares climbed Tuesday after the retail behemoth announced a pair of significant technology-driven initiatives aimed at redefining its e-commerce capabilities and pulling ahead in the competitive logistics race. The company revealed a strategic partnership with Google to integrate its products into the Gemini AI platform for a conversational shopping experience, and separately confirmed plans to create the largest drone delivery footprint of any retailer in the United States.
Shares of Walmart rose approximately 1.3% to close at $114.53 in Tuesday trading. The moves underscore Walmart's aggressive strategy to leverage its vast physical store network as a foundation for a high-tech, omnichannel future, directly challenging the digital-native dominance of Amazon.
AI-Powered Shopping with Google
In a move to make product discovery and purchasing more seamless, Walmart is collaborating with Google to allow customers to shop its catalog through the tech giant's Gemini artificial intelligence models. According to a corporate announcement, the integration will enable shoppers to move from 'inspiration to purchase' within a single, intuitive AI-driven environment. For example, a user planning an event could ask Gemini for ideas, and the AI could suggest and provide a direct path to purchase relevant products from Walmart.
This partnership is part of a broader industry shift toward 'agentic commerce,' where AI systems act on a user's behalf to complete complex tasks. For Walmart, which has a market capitalization of nearly $900 billion, linking accounts will also allow for deep personalization, including recommending items based on past purchases and integrating with existing membership benefits like Walmart+.
The Future of Delivery Takes Flight
Further bolstering its logistics network, Walmart is dramatically expanding its drone delivery service. The initiative will add the service to stores across five states—Texas, Florida, Arizona, Arkansas, and Utah—creating what the company calls the largest drone delivery footprint in the U.S. The expansion is powered by partnerships with Alphabet's Wing and Zipline, both of which have received Federal Aviation Administration (FAA) approval for flights beyond the pilot's visual line of sight, a critical regulatory hurdle for scaling operations.
The service promises delivery in 30 minutes or less for tens of thousands of items, from groceries to household essentials, weighing up to 10 pounds. As first reported by The Wall Street Journal, this move transforms local Walmart stores into high-tech fulfillment hubs, leveraging their proximity to 90% of the U.S. population.
"This is the largest drone-delivery expansion of any U.S. retailer," the company stated, highlighting the strategic advantage of its physical locations in the last-mile delivery battle. Wing separately noted the collaboration represents a landmark moment for the drone delivery industry.
Strategic Imperative in Retail's Tech Arms Race
These twin announcements are not happening in a vacuum. They represent a calculated and significant investment in Walmart's ongoing war for market share with Amazon. While Walmart maintains a lead in the U.S. online grocery market, recent data shows Amazon has surpassed it in overall quarterly revenue, underscoring the need for continuous innovation.
By integrating advanced AI for shopping and autonomous drones for fulfillment, Walmart aims to create a flywheel effect: A better, more convenient customer experience drives more online sales, which can be fulfilled rapidly and efficiently from its existing network of over 4,600 U.S. stores. This 'clicks-to-bricks' model is a core tenet of the company's growth strategy.
Wall Street has responded favorably to Walmart's tech-forward posture. The stock currently holds 40 'Buy' or 'Strong Buy' ratings from analysts, with only one 'Sell' rating. The consensus analyst price target sits at $121.56, suggesting further upside from its current level as these long-term technology investments begin to mature and scale across the nation.