Investors are worried about inflation, recession and economic data that could torpedo this year’s stock market recovery. But Walmart (WMT 6.58%) just reported its second-quarter results, which allayed many of those concerns. The stock is soaring after a report that beat estimates on both revenue and earnings.

Now, one Wall Street analyst believes there’s more to come, even though shares of the world’s largest retailer are already up 40 percent this year. In a report released after Walmart’s earnings report, Jefferies analyst Corey Tarlowe gave reasons why he thinks the stock is worth buying. He has a price target of $80 for Walmart shares, which represents a gain of another 10 percent.

Walmart relies on artificial intelligence (AI) and automation

In the conference call with investors, Walmart CEO Doug McMillon gave four specific reasons why customers are flocking to his company’s stores. He said customers want value, a wide selection, convenience and a company they can trust. He sees Walmart as a leader in all four areas.

But there is another reason why the company exceeded analysts’ forecasts for sales and profits in the second quarter: It is relying on technology and artificial intelligence (AI) in retail.

During the call, McMillon explained, “We are finding concrete ways to use generative AI to improve the experience of customers, members and partners.” This includes using data and large language-based AI models to align product offerings with what consumers are looking for.

The Jefferies analyst said this is a key reason why he believes Walmart stock has further room to run. The company raised its forecast for the current fiscal year and expects both revenue and operating profit to grow in the low to mid-single digits. That would be a very respectable result for the global retailer against a backdrop of other consumer goods companies predicting a weaker second half.