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Does the barcode below ring a bell? (Or, should I say, register?)
Wherever you’ve shopped, you come across them. Billions of shoppers around the world encounter them every day.
It’s a technology many of us overlook, but it revolutionized the checkout process. After barcode technology was adopted, it basically halved transaction times.
In 1988, Target Corp. (TGT) was among the first mass merchandisers to implement Universal Product Code (UPC) scanning, using barcodes to read prices and monitor inventory in real time.
The Minneapolis-based retailer rapidly expanded across the country in the years that followed. Of course, the barcode didn’t single-handedly drive Target’s growth, but it gave the big-box chain something invaluable: a faster, more efficient way to run its business. And the company’s sales continued climbing as the technology became part of its operations.
Now, nearly four decades later, Target is embracing another revolutionary strategy that could prove just as transformative: artificial intelligence leadership.
Last week, Target appointed Chandhu Nair as its first-ever chief AI officer (CAIO), with his tenure beginning Monday. His job will be to manage the organization’s overall AI strategy and align it directly with goals to enhance revenue, reduce costs, and promote growth.
By naming a CAIO, Target is following in the steps of industry peers like Ralph Lauren Corp. (RL) and Dollar General Corp. (DG). Businesses outside retail, such as Eli Lilly and Co. (LLY), Pfizer Inc. (PFE), and Accenture Plc (CAN), also have established CAIO roles.
In fact, an IBM study reported that 76% of surveyed organizations now have a CAIO, up from 26% last year.
That’s a remarkable shift in just one year, and it raises a bigger question: Why are companies suddenly putting AI at the C-suite level?
So, in today’s Smart Money, I’ll explore what Target plans to do with its CAIO role, what this decision signifies for the company, and how it impacts the broader AI landscape.
Then, I’ll highlight the proper ways to invest in this shift… before it really starts to “register.”
Let’s jump in…
Target’s Next Big Adoption
When Nair joined the Target team earlier this month, he explained his vision clearly: “What excites me most is the opportunity to make AI real for the people who experience Target every day.”
He elaborated on how he sees AI impacting the traditional shopping scene:
The most meaningful AI stories won’t be about what happens in a lab. They’ll be about what happens on the front line – how we make shopping easier for a guest, give a team member a better tool, make a business decision with more confidence, or bring a new idea to market faster.
Target also promoted Purvi Shah to Senior Vice President, who will work closely with Nair. Shah previously served as vice president of user experience design. Together, the two executives will help put people at the center of Target’s AI strategy – making shopping easier for customers while giving employees better tools to do their jobs.
But Target isn’t just using the technology to enhance the traditional shopping experience. CEO Michael Fiddelke said the company is preparing for a future where AI agents may frequently shop for humans. Target is already planning how its online platform will serve both human and AI agent shoppers.
And one thing that’s likely to play a role in this evolution? Barcodes.
While AI agents may eventually handle the shopping, barcodes can help make sure the physical products they order are identified, tracked, and delivered correctly. In that sense, the humble barcode could become an important link between AI-powered shopping and the physical world.
There is an important lesson here:
Target was an early adopter of barcode technology, but it didn’t invent it. It simply recognized how the technology could make its business better and put it to work.
Now, Target is taking a similar approach with AI. It didn’t invent the technology, but it is integrating it into its operations – at every level. And if AI helps Target improve by predicting demand, managing inventory, reducing markdowns, increasing margins, and boosting sales, then Target itself becomes a beneficiary of AI advancement.
This suggests that the greatest AI opportunity might not lie with companies developing AI itself, but with those figuring out how to apply it effectively. AI Builder companies like Nvidia Corp. (NVDA), Microsoft Corp. (MSFT), or OpenAI will not be the only ones reaping the economic benefits of AI.
In fact, now we know the list of AI winners is only growing.
But while Target may be a beneficiary of AI, that doesn’t make it a good investment. That distinction is becoming increasingly important.
That isn’t to say Target is a bad company, but it may not be the best way to capture the AI opportunity. Although its AI initiatives could improve efficiency and customer experience, the technology is not yet the core driver of its sales or earnings. So, I’m not recommending it as an AI play today.
But as AI leadership continues to spread into traditional industries, choosing the right stocks is becoming harder, not easier.
What to Buy, What to Dump, and How to Allocate
Target embraced the barcode years ago and is embracing AI today – evidence that the companies that put new technology to work are the ones that come out ahead. But not every adopter is worth owning.
That’s why Luke Lango, Louis Navellier, and I have sifted through our research and rebuilt our AI Revolution Portfolio into a focused list of roughly 20 companies – and we just released our presentation where we discuss it all. .
But what you own is only part of the equation. How much you own matters, too.
Each position in our AI Revolution Portfolio service comes with an allocation percentage. So, instead of simply recommending a certain AI stock, we’ll also show you how much weight each position should carry in your portfolio.
There’s a lot that goes into building a robust investment portfolio in today’s AI age. We want to make it easier for you. And our approach has already produced considerable results, including .
Like Target, Lumentum is also a beneficiary of the AI Revolution. But unlike the retailer, AI demand is becoming a direct driver of its business. Lumentum supplies optical components that help make AI infrastructure possible, and the company says that optical links are increasingly critical to AI data centers and that AI demand is driving its revenue guidance.
That’s the kind of distinction we’re looking for as we navigate the AI Revolution.
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Regards,
Eric Fry
