AI-Powered Retail Surge: 4 US Stocks Positioned for Strong Growth Amid Holiday Momentum

The retail landscape is undergoing a significant transformation powered by artificial intelligence and shifting consumer behavior. While September’s retail sales figures came in slightly below expectations at 0.2% sequential growth, the broader narrative tells a different story—consumers are increasingly gravitating toward online shopping, and forward indicators suggest substantial opportunity ahead.

The Market Backdrop: Why Now?

Recent developments paint an optimistic picture for retail-focused portfolios. The Federal Reserve’s 50-basis-point rate reduction since September has already started easing financial conditions, with markets now pricing in an 87.6% probability of another quarter-point cut in December. This environment matters because consumer spending tends to accelerate when borrowing costs decline.

The holiday shopping season has emerged as the pivotal catalyst. Black Friday demonstrated the power of AI-enhanced retail: online spending surged to $11.8 billion, representing a 9.1% year-over-year increase. More impressively, Mastercard SpendingPulse data revealed that online channels captured 10.4% growth compared to just 1.7% for physical retail—a clear signal that e-commerce infrastructure investments are paying dividends.

While labor market headwinds and inflation persist, the data reveals consumer confidence stabilizing enough to spend. Total retail sales from Q3 reached $733.3 billion, posting 4.3% annual growth despite unemployment sitting at four-year highs.

Four Compelling Retail Plays

Amazon.com Inc. (AMZN)

Amazon’s dominance in e-commerce and cloud services positions it as the cornerstone holding for retail-focused investors. The company’s Prime ecosystem continues expanding, supported by an unmatched logistics network. Additionally, Amazon Web Services maintains its commanding position in cloud infrastructure—a business segment that drives substantial profit margins and offsets seasonality in retail operations.

Earnings momentum supports the narrative: AMZN’s current-year earnings growth is projected at 29.7%, while consensus estimates have improved 4.8% over the past 60 days. The stock carries a Zacks Rank #2 designation, indicating strong fundamental support.

Boot Barn Holdings Inc. (BOOT)

This lifestyle retailer has carved a distinctive niche in western and work-related apparel. Boot Barn’s success stems from its omnichannel strategy—bootbarn.com complements physical locations, capturing both online conversion and foot traffic. The specialized product focus reduces direct competition from mass-market retailers.

Expected earnings growth stands at 20.5% for the current year, with consensus estimates climbing 6.9% over the past 60 days. BOOT maintains Zacks Rank #2 status, reflecting analyst confidence in near-term performance.

Tapestry Inc. (TPR)

As a designer and marketer of luxury accessories, Tapestry benefits from both discretionary spending recovery and international expansion potential. The company’s portfolio—spanning handbags, footwear, jewelry, and seasonal collections—provides multiple revenue streams less vulnerable to single-category weakness.

Current-year earnings growth is anticipated at 10.4%, with consensus estimates improved by 3.3% over the past 60 days. TPR’s Zacks Rank #2 positioning reflects methodical earnings expansion despite macro uncertainties.

Ross Stores Inc. (ROST)

Operating as an off-price retailer through Ross Dress for Less and dd’s DISCOUNTS, this company capitalizes on value-conscious shopping behavior that persists even during economic expansion. Off-price retail dynamics create durable demand regardless of consumer sentiment—a structural advantage during volatile periods.

The company projects 0.63% earnings growth this year, though consensus estimates have improved 2.7% in the past 60 days. ROST carries Zacks Rank #2 designation, suggesting recovery potential as inventory optimization gains traction.

The Investment Thesis

These four holdings share critical attributes: each demonstrates positive earnings momentum, commands Zacks Rank #2 ratings, and benefits from accelerating online penetration powered by AI tools and holiday consumer activation. The broader retail sector—buoyed by easier monetary policy, holiday tailwinds, and accelerating digital adoption—offers meaningful upside for investors with conviction in these fundamentals.

The 87.6% probability of December rate cuts combined with holiday season momentum creates a narrow but compelling window for portfolio positioning in US retail equities.