ChatGPT Weighs In: Should Investors Sell Target Stock After 30% Drop?

Investors are grappling with tough decisions regarding their portfolios as shares of Target Corp (NYSE: TGT) have plummeted by over 30% in 2025. With the stock now one of the worst performers in the S&P 500, questions arise about whether to hold or sell this troubled asset. One investor, who has navigated the markets since the 1980s, is particularly concerned about the impact of this downturn on his family’s investments.

In a diverse portfolio that includes more than 30 UK and US stocks, the investor has seen Target’s value decline sharply. The company’s share price fell by approximately 30.2% over the past year, and a staggering 45.1% over the last five years, pushing it down among its competitors. This dramatic drop has raised doubts about the stock’s recovery potential, especially as other retail stocks and the broader US market have performed relatively well.

Assessing Investment Strategy

The investor reflects on advice from renowned American investor Peter Lynch, who famously stated, “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” This philosophy urges investors to sell underperforming stocks, yet the investor remains conflicted about parting with Target shares.

As the value of their Target stock has decreased by 44.8% in pounds sterling, this marks the worst performance in over 15 years. To navigate this uncertainty, the investor sought insights from the AI chatbot ChatGPT. Although not a registered financial adviser, ChatGPT provided a balanced perspective on the situation, emphasizing the importance of understanding the underlying strengths and weaknesses of the investment.

ChatGPT pointed out that the drop in Target’s share price appears to be company-specific, suggesting the potential for a rebound once sales growth resumes. The AI cautioned against selling shares solely based on price declines unless the fundamental outlook of the company changes. Additionally, the current dividend yield for Target stands at over 4.8%, making it one of the most attractive in the S&P 500, which may provide a buffer against the falling share price.

Long-Term Perspective and Future Outlook

The investor also highlighted their long-term investment strategy, noting an ability to tolerate market volatility. The prospect of buying additional shares at lower prices, often referred to as a “buy the dip” opportunity, remains appealing. ChatGPT echoed this sentiment, suggesting that a significant drop in price might present a chance to enhance their investment position.

Nevertheless, ChatGPT cautioned that a sustained decline in the quality of business could warrant selling the stock. The investor does not perceive any current deterioration in Target’s business operations, expressing reluctance to divest before the upcoming holiday season, which could be pivotal for the company’s recovery.

Consequently, the investor plans to hold their Target shares until the next performance update in early 2026. However, they remain vigilant; if performance metrics such as sales growth, earnings, and cash flow continue to decline, a reevaluation will likely lead to selling the stock.

With a portion of cash set aside for potential market opportunities, the investor is also considering other investments. As they navigate this challenging environment, the insights gained from both experience and AI tools like ChatGPT will play an essential role in their decision-making process.

In conclusion, the situation surrounding Target Corp serves as a reminder of the complexities and challenges faced by investors in fluctuating markets. As they weigh the merits of holding versus selling, the lessons learned from past experiences and the evolving market landscape will guide their next steps.