Home Depot and Lowe’s Turn To AI To Win Contractor Spending

Before a contractor buys flooring, cabinets or plumbing supplies, someone has to figure out what the job needs and what it will cost. Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) want to make that work easier with artificial intelligence. They also have a reason to get involved early: helping plan the job could help them win the materials order.
That matters for investors because the materials order starts with the project estimate. Helping a contractor decide what to buy gives a retailer an earlier chance to earn the business.
When I spoke with Kai co-founder and CEO Or Agassi, he described how much time contractors spend measuring properties, estimating costs and finding materials. Kai uses smartphone videos and photos to create a scope of work, estimate costs and identify materials contractors can order through Home Depot.
With remodeling growth slowing, both chains need to give contractors a reason to buy from them. Making the planning easier could help, but the payoff depends on whether it brings in additional orders.

A Big Market With Slower Growth

High borrowing costs can make homeowners think twice about financing a major renovation, putting more pressure on retailers to win the projects that do move forward.
In its July forecast, Harvard’s Joint Center for Housing Studies projected that annual homeowner improvement and repair spending would reach $519 billion through mid-2027. Growth was expected to slow to 0.5% in the second quarter of 2027, with weak housing activity and economic uncertainty limiting stronger gains.
Home Depot reported second-quarter fiscal 2026 sales of $47.9 billion, up 5.7% from a year earlier. Comparable sales rose 1.7%, including a 1.3% increase in the U.S. Chief Financial Officer Richard McPhail said customers continued to engage in smaller projects. The retailer maintained its annual outlook for comparable sales ranging from flat to 2% growth.

From A Smartphone Video To A Materials Order

Agassi said his experience renovating and flipping more than 3,000 homes helped shape Kai, which is designed for renovation professionals.
He described a process in which contractors upload a smartphone video and Kai generates a scope of work covering measurements, quantities, pricing, labor and specific products.
Kai works with Home Depot, connecting its renovation planning tools to the retailer’s product catalog so contractors can identify and order the materials they need.
Kai announced the new video-scanning feature Oct. 6, saying it can reduce manual scoping time by approximately 70%. Contractors can review and change the AI-generated output before using it. For retailers, the potential benefit is a shorter path from assessing a property to preparing a materials order.
In an Oct. 6 announcement, Kai reported that annual material purchasing volume through its platform had surpassed $750 million.
The company said it has processed more than 25,000 renovations and serves more than 50 institutional operators and property managers.
The $750 million figure measures purchasing volume, not Kai’s revenue. The company’s announcement does not specify how much goes to Home Depot or how much is business the retailer would not otherwise have received.

Home Depot And Lowe’s Have Their Own Tools

Home Depot is also building tools that let contractors prepare materials lists and place orders without leaving its own platform.
In January, the retailer introduced Material List Builder AI. The tool allows professionals to create draft material lists using project descriptions, voice input or existing documents. After reviewing the list, users can select recommended products with pricing and inventory information and place an order. Home Depot makes the tool available free to Pro Xtra members within its Project Planning platform.
Lowe’s introduced its own Material Lists tool in May 2026. According to the company, the AI system converts handwritten notes, photos, spreadsheets and other supported files into product lists and quote-ready orders, with English and Spanish support.
Contractors start with different information in each tool, but the goal is similar: spend less time turning project details into an order.
The technology extends to the store, too. In August, Home Depot announced nationwide in-store capabilities for its Magic Apron assistant, helping shoppers locate products and get project guidance specific to their local store.
As both chains add similar tools, having AI may quickly become something contractors expect. The advantage will depend on whether the recommended products are right for the job, available at a competitive price and delivered when needed.

What Shareholders Should Watch

Investors will need to see whether contractors place more orders and keep coming back. Comparable sales, demand from professional customers and operating margins will help show whether the spending on these tools is paying off.
If a contractor simply places an existing Home Depot order through an app, the retailer has made shopping easier but has not necessarily increased sales. Winning an order that would have gone to another supplier is more meaningful. Delivery costs, discounts and the expense of running the technology still determine how profitable that order will be.
The upside is that contractors buy more of each job’s materials from one retailer and come back for the next project. The risk is that the tools mostly change how existing orders are placed, adding convenience and technology costs without much new business.
Kai shows how a renovation plan can become a retail order. As Home Depot and Lowe’s make that process easier, the competition could begin before a contractor ever enters a store. For investors, the results to watch are familiar: repeat customers, higher sales and the profits those orders generate.