Believe it or not, the holiday shopping season is here, so it's time to consider the best plays. As it stands, seasonal sales growth is expected to accelerate year over year to 4.55% to 4.8%, topping $1.7 trillion for the first time, underpinned as always by e-commerce. Digital sales are expected to top 8% seasonally and may outpace expectations as AI adoption accelerates. Hyperscalers, business services, and merchants are embedding AI throughout the digital retail stack, and it is resonating with consumers. An estimated 25% to 30% of shoppers say they will use AI this season for help with research, price comparisons, and budgeting.
While trends suggest that off-price retailers such as TJX Companies (NYSE: TJX) and big box stores, including Walmart (NASDAQ: WMT) and Costco (NASDAQ: COST), are well-positioned, Target (NYSE: TGT) looks like a more compelling play. The company has dual growth levers: overall sales are accelerating, and its turnaround is gaining traction.
