Lowe's Gains 0.52% on AI Momentum Amid Cautious Outlook Trading Volume Hits Lowest Among Top 137

Market Snapshot

Lowe’s (LOW) shares edged up 0.52% on February 26, 2026, closing at $264.39, despite a 38.74% decline in trading volume to $0.91 billion—the lowest among the day’s top 137 most actively traded stocks. The muted volume suggests limited investor activity, potentially reflecting a post-earnings consolidation phase following the company’s Q4 earnings report. While the stock’s modest gain contrasts with broader market declines, the sharp drop in trading activity underscores a cautious stance among traders, possibly due to mixed signals from the company’s forward guidance and macroeconomic headwinds in the home improvement sector.

Key Drivers

Lowe’s recent strategic pivot toward artificial intelligence (AI) has emerged as a pivotal growth lever, with CEO Marvin Ellison emphasizing its transformative role in operations and customer engagement. The company’s partnership with OpenAI to power the Mylow digital assistant has streamlined employee training, particularly for new hires who previously struggled with product knowledge. Ellison highlighted that Mylow’s AI capabilities now support bilingual interactions in Spanish, addressing language barriers in key markets and contributing to a two percentage-point improvement in in-store customer satisfaction scores. These enhancements have directly translated to business outcomes, including a doubling of online conversion rates since the assistant’s March 2025 rollout.

The AI-driven initiatives also align with broader industry trends, as competitors like Walmart and Amazon report e-commerce gains from similar technologies. Walmart’s Sparky chatbot, for instance, has boosted online basket sizes by 35%, while Amazon anticipates $10 billion in annual sales from its Rufus bot. Lowe’sLOW+0.52% has leveraged this momentum to outperform rival Home Depot in Q4 comparable sales growth, a rare feat in a sector grappling with high borrowing costs and stagnant housing turnover. Ellison’s focus on AI as a productivity tool—freeing merchandising teams from routine tasks and accelerating code development for tech workers—further underscores its operational efficiency gains.

However, the stock’s recent volatility reflects diverging signals from the company’s earnings report and forward outlook. While Q4 revenue rose 10.9% year-over-year, the firm’s 2026 guidance for flat to 2% sales growth fell short of investor expectations, triggering a post-earnings selloff. This duality—strong near-term performance versus cautious long-term forecasts—has created a tug-of-war in market sentiment. The 0.52% gain on February 26 may represent a short-term rebound, but the broader sell-off following the guidance revision highlights lingering concerns about macroeconomic resilience and the sustainability of AI-driven growth.

Lowe’s strategic emphasis on “agentic commerce” partnerships with leading tech platforms signals a commitment to long-term innovation. Ellison’s assertion that AI is “critically important” to the company’s future aligns with its broader digital transformation, which includes expanding Mylow’s capabilities to support more complex customer queries and supply chain optimizations. These moves position Lowe’s to capitalize on the AI arms race in retail, but the success hinges on maintaining momentum in customer adoption and operational efficiency. Analysts remain divided, with UBS reaffirming a “Buy” rating despite lowering its price target to $315, reflecting both optimism about AI integration and caution over macroeconomic risks.

In summary, Lowe’s stock performance reflects a balance between AI-driven operational improvements and sector-specific challenges. While the company’s technological investments have bolstered short-term results and customer satisfaction, the broader market’s reaction to its conservative guidance underscores the need for sustained execution in a high-interest-rate environment. The coming quarters will be critical in determining whether Lowe’s can maintain its competitive edge and translate AI innovations into consistent revenue growth.