3 Stocks to Watch (August 17-21): Walmart, Home Depot, Alibaba
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ICYMI: US retail sales (Fri, Aug 14) came in far worse than expected - pulling US stocks lower from record highs
From retail sales to retail earnings: What do America's biggest retailers say about the strength of consumers?
Home Depot expected to move 3.7% up/down after earnings on Tue, Aug 18 (before US markets open)
Walmart expected to move 4.3% up/down after earnings on Thu, Aug 20 (before US markets open)
Alibaba expected to move 5.7% up/down after earnings on Thu, Aug 20 (before US markets open)
ICYMI: US Retail Sales data spooked the market at the tail-end of last week.
Last Friday (Aug 14th), US retail sales fell 0.6% in July — the biggest drop in over a year, and well below the +0.1% gain economists had expected..
That single economic data release sent the S&P 500 down 0.2% from its record highs, as investors worried about a cooling American consumer.
That weaker-than-expected US retail sales makes this week's retail earnings must-watch events.
From retail sales, and now to retailers earnings: the numbers from Home Depot, Walmart, and Alibaba will tell us whether the consumer slowdown is a blip — or something bigger.
1) Home Depot - still stuck in sideways range?
Home Depot, the world's largest home improvement retailer, is set to unveil its Q2 FY2027 results before US markets open on Tuesday, Aug 18th.
Markets predict the stock could move 3.7% up/down when US markets open that day.
Key Themes to Watch
Same-store sales recovery: Analysts expect US comparable store sales to grow around +1% — a modest but meaningful improvement after a prolonged slump tied to high mortgage rates and a sluggish housing market.
Margins under pressure: Gross and operating margins may dip to multi-year lows for fiscal 2026, though easier year-over-year comparisons in Q2 could offer some relief.
Watch the outlook: Home Depot's CEO has signalled that underlying trends are stabilising.
Listen for any upgrade to full-year guidance, and for commentary on its AI-powered "Magic Apron" tool and its SRS acquisition contributing to long-term margin recovery.
Potential Scenarios
Markets expect Home Depot to react to its earnings with a 3.7% move, up or down.
UPSIDE: Home Depot may rally toward $350.63 if same-store sales beat expectations and management upgrades its full-year outlook — signalling that the long-awaited housing recovery is finally gaining traction.
DOWNSIDE: Home Depot may slide toward $325.61 if comparable sales disappoint or management stays cautious on the outlook, reinforcing fears that a soft consumer will delay any housing-led recovery.
Wall Street experts predict that Home Depot could rise another 9.6% over the next 12 months - though analysts may shift that target may shift depending on what management says about its earnings outlook.
2) Walmart to test 100-day SMA resistance?
Walmart, the world's largest retailer, is set to unveil its Q2 FY2027 results before US markets open on Thursday, Aug 20.
Markets predict the stock could move 4.3% up/down when US markets open that day.
Key Themes to Watch
Same-store sales momentum: Analysts expect US comparable store sales to grow around 3–3.5%, a slight slowdown from Q1's 4.1% — but Friday's weak retail sales data raises the stakes for whether Walmart is still winning wallet share.
Tariff refund windfall: Walmart may have received $2–3 billion in tariff refunds in Q2, which it could be reinvesting into price cuts to grab grocery market share — a potential upside surprise the market may be underestimating.
The new Walmart story: Beyond groceries, watch for updates on e-commerce (expected ~25% growth), advertising, and membership — these higher-margin businesses are what justify Walmart's premium valuation and are the key to its long-term earnings power.
Potential Scenarios
Markets expect Walmart to react to its earnings with a 4.3% move, up or down.
UPSIDE: Walmart may climb toward $120 and test resistance around its 100-day simple moving average (SMA) if comparable sales beat expectations and management raises full-year guidance - showing that Walmart's value proposition is resonating even as the broader consumer weakens.
DOWNSIDE: Walmart may slip towards the psychological $110 price level if same-store sales disappoint or guidance is cut, raising fears that even the most defensive retailer is not immune to a consumer pullback.
Wall Street experts predict that Walmart could rise another 21.5% over the next 12 months - though analysts may shift that target may shift depending on what management says about its earnings outlook.
3) Alibaba to hit 2-month high?
Alibaba, China's e-commerce and cloud giant, is set to unveil its Q1 FY2027 results before US markets open on Thursday, Aug 20.
Markets predict the stock could move 5.7% up/down when US markets open that day.
Key Themes to Watch
Cloud is the main event: Alibaba's cloud revenue growth is expected to accelerate sharply - driven by surging demand for AI-related services - and cloud margins are expected to expand meaningfully as higher-margin AI products take a bigger share of the mix.
Quick commerce losses narrowing: Alibaba has been burning cash competing in food delivery - but losses are expected to have shrunk significantly in the June quarter, which would be a major positive signal for overall profitability.
E-commerce stabilising: Core e-commerce market share losses appear to be slowing, and investors will be watching closely for any sign that the worst of the margin compression is behind Alibaba — even as AI and user-acquisition spending remains elevated.
Potential Scenarios
Markets expect Alibaba to react to its earnings with a 5.7% move, up or down.
UPSIDE: Alibaba may rally toward $133 if cloud revenue growth beats expectations and quick commerce losses narrow faster than feared - confirming that its AI transformation is delivering real financial results.
A break above $133.10 would mark its highest prices since early-June.
DOWNSIDE: Though having found critical support around its 21-day SMA in recent days, Alibaba may slide toward $118.55 if cloud growth disappoints or e-commerce margins remain under pressure - reigniting concerns that heavy AI spending is not yet translating into earnings recovery.
Wall Street experts predict that Alibaba could rise another 47.6% over the next 12 months - though analysts may shift that target may shift depending on what this Chinese tech giant says about its AI monetisation roadmap.
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