AI Battle Heats Up: Which Home Retail Giant Will Take the Lead, HD or LOW?

In today’s increasingly fierce retail competition era, the two giants in the U.S. home improvement market—The Home Depot, Inc. (HD) and Lowe’s Companies, Inc. (LOW)—both view artificial intelligence as a strategic weapon vital to their survival. As AI technology penetrates consumer shopping decisions, supply chain management, and professional services, these two companies are reshaping the competitive landscape of the entire home improvement market in very different ways. The question is, whose AI investment strategy is more forward-looking and better executed?

Data Speaks: Divergence Between Financial Performance and Market Expectations

According to the latest consensus forecasts, the growth trajectories of the two companies are showing interesting divergence.

Home Depot’s fiscal year 2025 expectations show sales growth of only 3.2%, but EPS is expected to decline by 4.5%. By 2026, sales growth is projected to accelerate to 4.4%, with EPS increasing by 4.1%. Over the past 30 days, HD’s EPS consensus estimates have fallen by $0.17 and $0.51, respectively, to $14.51 and $15.10.

Lowe’s financial outlook appears more optimistic. For fiscal year 2025, sales and EPS growth are expected at 2.9% and 2.2%, respectively, but by 2026, growth is expected to accelerate to 8.7% and 6.2%. Meanwhile, LOW’s EPS estimates have been revised downward by only $0.01 and $0.10, currently at $12.26 and $13.01.

Stock performance further validates market divergence. Over the past six months, HD’s stock has declined by 3.9%, while LOW has defied the trend and risen by 10%—a difference that reflects not only market sentiment but also a preliminary assessment of the effectiveness of their AI strategies.

In terms of valuation, HD’s forward P/E ratio is 23.03X, slightly below the 52-week median of 24.00X; LOW’s forward P/E is 18.72X, slightly above the median of 18.62X. This indicates that the market is assigning a higher premium to LOW’s future growth prospects.

HD’s AI Approach: Small Steps, Fast Pace vs. Large and Comprehensive

Home Depot has adopted a pragmatic and cautious approach, viewing AI as an invisible infrastructure rather than a flashy marketing tool. This “silent executor” stance is reflected in three levels:

Client-side intelligent transformation. The Magic Apron generative AI tool launched in early 2025 has covered millions of product pages on the website and mobile app. Its role is to act as a virtual associate—answering product questions, summarizing user reviews, comparing items, and providing usage suggestions based on internal data. The core of this design is to improve conversion rates while maintaining a familiar shopping experience.

Behind-the-scenes silent optimization. Machine learning models like the “Optimal Shipping Location” system continuously optimize fulfillment efficiency. Computer vision and inventory algorithms make replenishment and order picking more precise across over 2,300 stores. These seemingly unnoticed improvements can, over time, significantly reduce costs and accelerate delivery.

Smart upgrade of Pro business. The Blueprint Takeoffs AI tool automates the conversion from architectural drawings to material lists and cost estimates. For contractors, this fundamentally changes project planning time costs, making HD a one-stop partner from design to purchase.

The advantage of this strategy lies in its robustness and verifiability, but the obvious issue is that it mainly optimizes existing processes rather than redefining the consumer experience of the home improvement market.

LOW’s Ambition: Reshaping Retail Operations

In contrast, Lowe’s has taken a more aggressive “AI-first” route. Its Total Home strategy aims to connect customer planning, employee expertise, and corporate decision-making through a unified intelligent layer, creating a completely different retail ecosystem.

Empowering consumers. The MyLowe tool acts as an always-online home improvement expert, helping users move from inspiration to action through personalized recommendations, step-by-step guidance, and contextual product suggestions. This not only boosts customer confidence but also directly translates into larger shopping baskets and higher project completion rates—in other words, AI becomes a tool for directly generating revenue.

Supporting employees. The MyLowe Companion provides real-time product intelligence, inventory data, and professional insights to over 1,700 stores’ staff. The philosophy behind this approach is to amplify, not replace, human expertise with AI—crucial for maintaining retail service quality.

Reconstructing the entire system. Through collaborations with OpenAI, NVIDIA, Palantir, and Apple, Lowe’s is exploring spatial commerce, digital twins, and simulation-driven retail design. This means Lowe’s is not just using AI but reimagining the entire retail future with AI.

The risk of this approach lies in higher investment and longer return cycles, but once successful, its competitive barriers will far surpass process optimization improvements.

Who is Winning? The Signals Are Clear

Looking at the current state of the home improvement market, both strategies have their logic. HD represents the “steady hand”—strengthening existing advantages with AI and reducing risks; LOW represents the “offensive”—transforming the business model itself with AI.

In the short term, data suggests LOW has gained more market recognition. Rising stock prices, higher expected growth rates in 2026, and larger EPS growth all indicate investors have more confidence that its AI strategy will translate into real performance.

But this does not mean HD is doomed to fail. Its stronger execution and more solid foundation may be better suited to the long cycles of retail. The real key to victory depends on who can more effectively turn AI into part of daily decision-making rather than just a technological novelty.

In this era of AI reshaping retail, the home improvement market is undergoing a profound structural change. The final winners will not be determined solely by investment scale but by who can smarter combine intelligence and execution.