Advertisement United States / Specialty Stores / NYSE:HD Can Home Depot’s (HD) AI Efforts Balance Declining Same-Store Sales and Earnings Outlook? Simply Wall St Reviewed by Sasha Jovanovic January 16, 2026 Recently, Home Depot reported weaker comparable sales and forecasted a roughly 5% decline in full-year adjusted EPS, highlighting ongoing concerns about subdued consumer demand and tightening operating margins. Concurrently, the company is broadening its AI initiatives by partnering more deeply with Google Cloud’s Gemini models and implementing Rilla’s real-time coaching tools, aiming to boost customer service and operational efficiency. Investors face a notable tension: while Home Depot deploys AI-driven solutions like Magic Apron and Rilla’s coaching platform to improve service and productivity, these innovations coincide with two consecutive years of declining same-store sales and falling EPS despite revenue growth. This report examines how the cautious earnings guidance and softness in same-store sales could influence Home Depot’s longer-term investment outlook. Advertisement Home Depot Investment Narrative Summary Investing in Home Depot requires confidence that its scale, brand strength, and focus on professional customers can withstand weaker consumer demand, declining comparable sales, and margin pressures. The recent earnings report—with a 5% EPS decline guidance and negative share price reaction—heightens near-term concerns about profit resilience. The primary risk remains persistent delays in major projects and ongoing margin compression rather than immediate threats from new AI initiatives. Significantly, Home Depot’s expanded partnership with Google Cloud to introduce Gemini-powered “agentic AI” tools—including enhancements to Magic Apron and Pro list builders—directly targets key growth drivers: improved service, higher productivity, and streamlined logistics. This innovation attempts to counterbalance worries stemming from two years of lagging same-store sales and less profitable incremental revenue. However, investors should be mindful of the rising capital expenditures and AI investment demands growing alongside these technological upgrades. Home Depot projects $182. 4 billion in revenue and $17. 4 billion in earnings by 2028, which necessitates an annual revenue growth of 3. 4% and an earnings increase of about $2. 8 billion from the current $14. 6 billion. This outlook implies a potential 4% upside relative to today’s stock price. Exploring Alternative Views Seven Simply Wall St community members place Home Depot’s fair value between $278 and $394 per share, reflecting diverse expectations. Given this context, persistent softness in same-store sales and downward EPS revisions could materially impact how these valuations align with actual business outcomes. Notably, some analyses argue the stock could be worth up to 27% less than its current price. Craft Your Own Home Depot Investment Thesis If you disagree with prevailing narratives, remember exceptional investment returns often arise from independent analysis.

Our detailed evaluation highlights key factors that may influence your decision on Home Depot. Our comprehensive fundamental assessment, visualized through the Snowflake model, provides an at-a-glance view of Home Depot’s financial health. Looking for Other Investment Opportunities? Our analysis has flagged several stocks gaining momentum today. Act quickly before their prices rise: - Companies leading advances in next-gen tech, including quantum algorithms and superconducting qubits. - Healthcare innovators powered by AI, all currently under $10 billion in market cap—offering early entry potential. We have identified multiple such opportunities and provide the full list free of charge. Disclaimer: This Simply Wall St article provides general commentary based on historical data and analyst forecasts through an unbiased methodology. It is not financial advice or a recommendation to buy or sell securities and does not consider individual objectives or financial situations. Our analysis may not incorporate the latest price-sensitive announcements or qualitative factors. Simply Wall St holds no positions in the stocks mentioned. Valuation can be complex; we strive to simplify it. Discover whether Home Depot is undervalued or overvalued via our detailed analysis, featuring fair value estimates, risk factors, dividends, insider trading activity, and financial health assessments. Access Free Analysis Questions or concerns about this article?Contact us directly or email editorial-team@simplywallst. com About NYSE:HD Home Depot operates as a home improvement retailer in the United States and internationally. It is an established dividend payer with a solid balance sheet. Advertisement Weekly Picks and Popular Narratives - Ferrari: Fair value €243. 56; currently 25. 8% overvalued. - Costco Wholesale: Fair value $726. 29; 31. 7% overvalued. - Neo Performance Materials: Fair value CA$25. 33; 24. 8% undervalued. - PayPal Holdings: Fair value $82; 30. 8% undervalued. - NVIDIA: Fair value $253. 02; 26. 1% undervalued. - Rocket Lab: Fair value $16. 25; 58. 5% overvalued. Follow these and other narratives for investment insights. --- This summary preserves the original content volume while clarifying and condensing key points for easier comprehension.