The future of online shopping apparently involves chatbots selling you stuff, and Walmart Inc. (WMT) isn't wasting any time figuring out how to make money from it. The retail giant is quietly testing advertisements inside Sparky, its AI shopping assistant, according to a Wall Street Journal report citing sources familiar with the matter.

Sparky works essentially like ChatGPT for shopping. It summarizes product reviews, compares items side-by-side, and suggests options based on your specific needs or upcoming events. Walmart added the tool to its mobile app back in June, and now it's experimenting with a new ad format called "Sponsored Prompt" alongside select advertisers.

Here's how it works: Walmart displays a Sponsored Prompt on Walmart.com, and when users click on it, Sparky responds with an answer followed by a click-to-buy ad for a featured product. According to the company's own presentation, the feature is designed to drive brand engagement and deliver personalized recommendations through Sparky conversations. The early results? Not exactly stellar. Sources told the WSJ that engagement and click-through rates in Walmart's Sparky pilot have remained low so far.

Why Walmart Is Betting Big on AI Commerce

This isn't just about adding another revenue stream. Walmart is using AI-powered shopping tools to protect its dominant market position as consumer behavior shifts toward autonomous shopping agents. The company clearly sees where things are headed: retailers that can pair AI-generated guidance with detailed product data and insights on shopper preferences stand to capture a bigger slice of the online sales pie.

And that pie is getting enormous. U.S. consumers could spend over $1.27 trillion online this year, up nearly 17% from 2024, according to eMarketer. Walmart has also partnered with OpenAI so ChatGPT users in the U.S. will soon be able to buy Walmart products directly inside the chatbot.

The push into advertising makes strategic sense for Walmart. The retailer is doubling down on its high-margin advertising business while grocery sales—which historically deliver razor-thin margins—continue to dominate U.S. revenue. More ads mean better profitability without having to sell more bananas.

Strong Financials Support the AI Investment

Walmart stock has climbed over 19% year-to-date, and the company delivered stronger-than-expected third-quarter results last week. Adjusted EPS came in at 62 cents versus the Street's 60-cent estimate, while revenue hit $179.50 billion, topping the $177.429 billion consensus.

The retailer raised its fiscal 2026 adjusted EPS outlook to $2.58-$2.63, above its prior range of $2.52-$2.62 and the $2.61 analyst consensus midpoint. Walmart also boosted its fiscal 2026 constant-currency revenue growth forecast to 4.8%-5.1%, up from the prior range of 3.75%-4.75%. The company will shift its stock listing to the Nasdaq on December 9, 2025, while keeping the "WMT" ticker.

Amazon and the Race to Monetize AI Shopping

Walmart isn't alone in this race. Competitors are moving aggressively to stake their claims in AI-driven commerce. Amazon.com Inc. (AMZN) has already introduced Sponsored Prompts inside Rufus, its own AI shopping chatbot, which boasts 250 million active customers this year. That's a massive audience, and Amazon's early move into AI advertising suggests the company sees real potential in the format.

The question now is whether consumers will actually engage with ads delivered through AI assistants, or if they'll treat chatbot recommendations with the same skepticism they apply to sponsored search results. Walmart's low engagement rates in early testing suggest there's work to be done, but retailers are clearly betting that AI-powered shopping represents the future of online commerce.

Price Action: WMT stock was trading higher by 0.78% to $107.83 at last check Wednesday.