On February 21, The Wall Street Journal shed light on the Retail industry, which is expected to undergo structural changes in 2026. The firm anticipates AI-linked disruptions to take the center stage. Moreover, retailers will need to become more considerate of evolving consumer preferences.

WSJ reflected on Deloitte’s report “2026 Retail Industry Outlook,” which was published back on January 8. The report indicates that the industry focus will be heavily tilted towards value-seeking consumers, AI-driven disruptions in commerce, and AI-based marketing strategies.

As part of the report, Deloitte surveyed 330 global retail executives on how they are preparing themselves for these changes. Natalie Martini, Vice Chair, U.S. Retail and Consumer Products at Deloitte, stated:

The world isn’t so predictable anymore, and we’re seeing that in our survey. Companies have to step back to address external pressures, including AI, even if it means they’re not optimizing in the short term.

For investors, retail industry stocks offer significant portfolio diversification benefits, since the underlying companies cover various sub-industries. Additionally, many of these businesses are well-reputed for their attractive payouts, which could entice passive income hunters.

With that background, let’s explore our 10 Best Retail Stocks with Huge Upside Potential.

Our Methodology

To identify relevant stocks for this article, we screened U.S.-listed retail companies with market capitalizations above $2 billion. Also, we only shortlisted stocks with at least 20% upside potential according to TipRanks consensus, as of March 4 closing. Finally, we selected 10 stocks with the highest upside and ranked them in ascending order.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

10. Amazon.com Inc. (NYSE:AMZN)

Amazon.com Inc. (NYSE:AMZN) is one of the 10 best retail stocks with huge upside potential.

On February 23, Wells Fargo reduced its target price for Amazon.com Inc. (NASDAQ:AMZN) from $305 to $304. The firm maintained an Overweight rating on the stock, offering more than 40% upside potential to investors at the current level.

Wells Fargo notes that the compute capacity is a key success factor for Amazon.com Inc. (NASDAQ:AMZN), as AI-driven demand is expected to surpass supply in the near to medium term. The hyperscaler capacity is forecasted to double to 98GW with capital spending of $860 billion per year by 2027, and the cloud market is seen to expand much faster than consensus.

Back on February 6, Oppenheimer reduced the firm’s price target on Amazon.com Inc. (NASDAQ:AMZN) from $325 to $260. However, the firm maintained its Outperform rating on the stock, yielding a revised upside of almost 20% despite the downward adjustment.

The revision came at the back of the company’s quarterly results. Despite a higher capex outlook driving the change, the firm remains confident in an AWS ramp supported by accelerating revenue and market share gains.

Amazon.com Inc. (NASDAQ:AMZN) is a technology company engaged in e-commerce, cloud computing, streaming, AI solutions, and physical retail. It offers consumer retail, advertising, and subscription solutions through an extensive network of online and brick-and-mortar stores worldwide. The company also develops and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Blink, and eero.

9. Coupang Inc. (NYSE:CPNG)

Coupang Inc. (NYSE:CPNG) is one of the 10 best retail stocks with huge upside potential.

As of the close of play on March 4, the consensus sentiment for Coupang Inc. (NYSE:CPNG) remained moderately bullish. The stock received coverage from 11 analysts, 8 of whom assigned Buy ratings and 2 gave Hold calls. With just 1 Sell rating, it has a projected median 1-year price target of $25.18. This results in an upside potential of almost 32% at the current level.

On March 2, Morgan Stanley reduced its price target on Coupang Inc. (NYSE:CPNG) from $31 to $29. The firm maintained an Overweight rating on the stock, yielding almost 52% upside potential even after the revision.

The firm believes that the company has moved beyond the impact of the data breach, with regulatory risks subsiding and losses being assessed. The firm also notes that operational performance in Korea is improving and developments in Taiwan appear to be on track.

Coupang Inc. (NYSE:CPNG) is a technology company based in South Korea that is involved in e-commerce and logistics around the globe. The company leverages its mobile applications and internet websites to deliver various offerings. These include Rocket Fresh, Coupang Eats, Coupang Play, and Farfetch.

8. Group 1 Automotive Inc. (NYSE:GPI)

Group 1 Automotive Inc. (NYSE:GPI) is one of the 10 best retail stocks with huge upside potential.

On February 28, Morgan Stanley reduced its price target on Group 1 Automotive Inc. (NYSE:GPI) to $400 from $460. The firm maintained an Overweight rating on the stock, following the company’s mixed fourth-quarter results.

Morgan Stanley remains selective in the auto dealers’ space, favouring strong operators that can maintain earnings stability in an uncertain market environment. The firm highlights that despite cost headwinds in the U.K. and new vehicle sales declines, the Group 1 management team has been consistent in maintaining its gross profit per unit, while after-sales continue to be a source of earnings support.

On February 20, Group 1 Automotive Inc. (NYSE:GPI) was upgraded from a Neutral rating to an Overweight by JPMorgan. Price target for the stock was maintained at $370, resulting in a double-digit upside potential of over 13%. The firm highlighted the company’s “best-in-class execution” as a key differentiator, justifying a more constructive outlook.

Group 1 Automotive Inc. (NYSE:GPI) is an automotive retailer that is engaged in the sale of light trucks and new and used cars. The company operates a digital platform and an extensive dealership network comprising more than 250 dealerships and 30+ collision centers. It also offers insurance contracts, replacement parts, and vehicle financing services.

7. Global-E Online Ltd. (NYSE:GLBE)

Global-E Online Ltd. (NYSE:GLBE) is one of the 10 best retail stocks with huge upside potential.

On February 26, Truist reduced the price target for Global-E Online Ltd. (NYSE:GLBE) from $43 to $42. The firm maintained a Hold rating on the stock, yielding an upside potential above 17% at the prevailing level.

Following the fourth-quarter results, the adjustment reflects a model update driven by softer revenue and gross profit estimates. The firm highlighted concerns about take-rate compression, which is trending worse than previously anticipated. Truist views it as a primary headwind within the broader Payments sector.

On February 19, Bank of America Securities raised its price target on Global-E Online Ltd. (NYSE:GLBE) to $52 from $50. This leads to an upside potential of more than 45% at the current level. The firm also maintained a Buy rating on the stock after the company posted impressive fourth-quarter results and provided an outlook for 2026 that beats the firm’s and street’s estimates.

Global-E Online Ltd. (NYSE:GLBE) operates a platform that delivers direct-to-consumer cross-border e-commerce solutions, covering more than 200 destinations worldwide. The platform allows shoppers and merchants to buy and sell online, and also enables brands to elevate their international conversion through the localization of the shopper experience.

6. Lithia Motors Inc. (NYSE:LAD)

Lithia Motors Inc. (NYSE:LAD) is one of the 10 best retail stocks with huge upside potential.

On March 3, Lithia Motors Inc. (NYSE:LAD) announced that the company is acquiring Toyota of Gallatin and Mercedes-Benz of Medford. These transactions bring the company’s cumulative year-to-date annualized U.S.-based revenue through acquisitions to $225 million. The deals were financed through the company’s on-balance-sheet resources.

Earlier, on February 20, Lithia Motors Inc. (NYSE:LAD) was downgraded from an Overweight rating to Neutral by JPMorgan. The firm reduced the price target on the stock from $350 to $335, resulting in an upside potential of nearly 23% for investors.

The firm noted that while the company’s fourth-quarter same-store performance was robust, the effect was negated by weaker-than-anticipated cost control measures. With execution visibility continuing to be a challenge, the company’s balance sheet leverage has also now reached the high end of its targeted range.

Lithia Motors Inc. (NYSE:LAD) is an automotive retailer that is involved in the sale of new or used vehicles and provides related services. The company offers end-to-end solutions across the entire vehicle ownership lifecycle. These include vehicle financing, insurance, aftersales services, and repair & maintenance services.

While we acknowledge the potential of LAD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LAD and that has 100x upside potential, check out our report about the cheapest AI stock.

Click to continue reading and see the 5 Best Retail Stocks with Huge Upside Potential.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.