Home Depot vs. Lowe's: Both Retail Giants Are Tapping AI, but Which One Is Doing It Better?

By Will Healy – Mar 4, 2026 at 3:35AM ESTKey PointsHome Depot developed Magic Apron for product question and an AI-driven Pro Xtra program for loyalty customers.The Mylow digital assistant has freed up more time for face-to-face interaction at Lowe's.As most investors know, Home Depot (HD 1.05%) and Lowe's Companies (LOW +0.22%) are the country's two largest home improvement retailers. They have succeeded for decades by providing for such needs, and it should not come as a surprise that both companies have pivoted extensively into artificial intelligence (AI). What may intrigue investors is that each company is not necessarily taking the same approach with AI, and that could affect profitability and, ultimately, stock returns over time. Hence, investors should evaluate each strategy to find which company has capitalized on AI in retail better. Image source: Getty Images. Each company's solutions Most customers generally regard Home Depot as the store more geared toward contractors. To that end, the company is working to make AI an integral part of its customers' home improvement projects. In partnership with Alphabet's Google, the company developed the Magic Apron assistant to deliver advice about projects and answer questions about products, both in the store and on its website and app. And members of the Pro Xtra loyalty program for professional contractors can use the company's AI to generate project requirements and a corresponding product list for these customers. The technology will also help with finding items within the store and answering customer service questions. In contrast, Lowe's bills itself as the store better suited for do-it-yourself (DIY) projects and has designed its AI to serve these customers. In a partnership with OpenAI, Lowe's has launched the Mylow digital assistant to help train employees to sell products more effectively. It will also help customers find products needed for various DIY projects through the first-ever AI-powered virtual advisor. More recently, Lowe's has deployed AI agents across its stores to help answer basic questions, freeing up employees for more face-to-face customer interactions. Results of AI Despite AI's potential, the results are unclear, as neither company mentioned AI in its earnings report. Still, in the earnings-call transcripts, Home Depot discussed how the technology helps contractors. Lowe's executive vice president for merchandising, William Boltz, took a different approach, talking about how AI helped employees perform jobs more efficiently. ExpandNYSE: LOWLowe's CompaniesToday's Change(0.22%) $0.56Current Price$257.73Key Data PointsMarket Cap$145BDay's Range$251.33 - $258.9452wk Range$206.38 - $293.06Volume113KAvg Vol2.8MGross Margin31.22%Dividend Yield1.84% Moreover, each company delivered a similar financial performance in 2025, with net sales up 3% yearly for both. Investors should note that each company reported slightly lower earnings amid rising operating expenses. That might partly explain the emphasis on employee productivity. Still, Home Depot stock sells at a premium at a price-to-earnings ratio (P/E) of about 26 times versus the 22 for Lowe's. Home Depot has also had the higher P/E ratio for most of the last five years and offers a higher dividend yield: 2.4% compared to 1.8% for Lowe's. In the minds of some investors, that may justify Home Depot's higher valuation. Home Depot or Lowe's? Home Depot appears to hold the slight edge between the two. Lowe's trades at a lower valuation and appears to provide more verbal feedback on the effects of AI on its business. However, discussion is not the same as hard data on AI-driven results, which neither company offered. Thus, investors should turn to the available data. Home Depot may have a slightly higher historical valuation, but when factoring in its contractor-supplier business and higher dividend yield, it is considered one of the best housing stocks for 2026.Read NextDec 31, 2025 •By Daniel Foelber5 Dow Jones Stocks Fell Over 10% in 2025. Here's Why They Are All Contrarian Buys for 2026.Dec 12, 2025 •By Neil PatelHow Good Has Home Depot (HD) Stock Actually Been?Dec 9, 2025 •By Timothy GreenHome Depot Sees Limited Growth Without Housing Market ReboundDec 6, 2025 •By Jennifer SaibilCan Home Depot (HD) Stock Rebound in 2026?Nov 23, 2025 •By Daniel FoelberHome Depot Just Flashed Another Warning.

Is It Time to Give Up on the Dividend-Paying Dow Stock?Nov 22, 2025 •By Neil PatelIf You'd Invested $10,000 in Home Depot (HD) 3 Years Ago, Here's How Much You'd Have TodayAbout the AuthorWill Healy is a contributing Motley Fool stock market analyst covering technology and consumer goods industries.

Before The Motley Fool, Will was a freelance writer covering stocks and personal finance for MSN Money, Yahoo! Finance, and Nasdaq. Earlier in his career, he was an expert in geographic information systems, applying spatial and IT skills to perform RF and demographic analysis in the telecom industry. He holds a bachelor’s degree in journalism from Texas A&M University and an MBA in finance and strategy from the University of Texas at Dallas.TMFWillHealyX@HealyWritingStocks MentionedHome DepotNYSE: HD$366.54(-1.15%)-$4.27AlphabetNASDAQ: GOOGL$303.70(-0.92%)-$2.82Lowe's CompaniesNYSE: LOW$257.73(+0.22%)+$0.56AlphabetNASDAQ: GOOG$303.56(-0.91%)-$2.80*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.