Truist Upgrades Best Buy to Buy, Says AI Consumer Devices Will Fuel Sales Growth

Best Buy Co. Inc. (BBY) is poised to benefit from a wave of artificial intelligence integration into consumer electronics, a trend that prompted Truist Securities to upgrade the retailer's stock to buy from hold on Tuesday.

Analyst Scot Ciccarelli also raised the firm's 12-month price target to $95 from $81, implying roughly 15% upside from Monday's close. The call arrives ahead of Best Buy's fiscal second-quarter earnings report scheduled for August 27, where Ciccarelli expects the company to post a 2.5% increase in U.S. same-store sales, well above the roughly 1% gain anticipated by Wall Street analysts.

"We think the improvement is being driven by continued replacement demand, internal changes and emerging mini-product cycles," Ciccarelli wrote in a note to clients. The analyst pointed to improved appliance delivery logistics and new hardware categories such as AI-powered wearables as catalysts that, while individually modest, collectively support a more consistent pace of positive comparable sales growth.

At the consumer level, artificial intelligence is currently accessed primarily through computers and smartphones. However, the hardware specifications required to run advanced AI models continue to rise, and manufacturers are embedding the technology into smart glasses, rings, watches and other wearable devices. Truist believes that proliferation will accelerate the replacement cycle for consumer hardware, ultimately lifting sales at Best Buy.

"As AI proliferates, we think we could see an accelerated adoption process for consumer hardware that would ultimately benefit Best Buy," Ciccarelli said. "While we view this rating change as tactical and trading-oriented, the proliferation of AI in the consumer market could provide a much longer runway."

The upgrade stands in contrast to the prevailing sentiment on Wall Street. According to LSEG data, of the 26 analysts covering Best Buy, 21 rate the stock a hold, while only three assign a buy or strong buy rating. The average price target among 18 analysts tracked over the past three months sits at roughly $80, suggesting a potential decline of about 3%.

Best Buy shares rose 1% in afternoon trading Tuesday and have climbed 24% year to date. Over the past three months, the stock has surged 43%.

Ciccarelli noted that if the company delivers same-store sales growth of 2.5% or more for the second quarter, the market is likely to raise estimates for the second half of the fiscal year, even if management issues a conservative outlook. Truist lifted its fiscal 2026 earnings per share estimate to $6.70 from $6.65, and its fiscal 2027 forecast to $7.15 from $7.10. Both figures sit above current consensus estimates of $6.55 and $7.02, respectively.

The bullish view is not without detractors. In April, Goldman Sachs analyst Kate McShane double-downgraded Best Buy to sell, citing pressure on profit margins from surging memory chip prices. Best Buy's first-quarter results, however, showed sales growing about 2% year-over-year to $8.94 billion, exceeding the consensus estimate of $8.82 billion. The company has beaten analysts' earnings per share expectations for six consecutive quarters.

Adding to the leadership transition narrative, Best Buy last week appointed Anne Bramman as chief financial officer, effective August 19. She arrives ahead of incoming Chief Executive Officer Jason Bonfig, who is set to succeed Corie Barry on November 1.

Ciccarelli, who ranks in the top 2% of more than 12,000 analysts tracked by TipRanks, holds a 69% success rate on his ratings and has generated an average return of 15.20% for investors. He covers the U.S. retail industry.

"While each of these drivers is still relatively mild on a standalone basis, collectively we believe they are sufficient to drive more consistent low-to-mid single-digit comparable sales gains over the next several quarters," Ciccarelli wrote.