The holiday shopping season just wrapped up, and here's the surprise: people actually spent money. Like, real money. Despite all the hand-wringing about inflation and economic uncertainty, retail spending climbed 4.2% compared to last year. That's the kind of news that gets investors excited about Amazon.com Inc. (AMZN), Walmart Inc. (WMT), and Target Corp. (TGT).

Consumers Kept Spending, Inflation Be Damned

Visa Inc. (V) released preliminary data on Tuesday showing that U.S. consumers demonstrated remarkable resilience during the 2025 holiday season. The analysis tracked payment activity over seven weeks beginning November 1, excluding autos, gasoline, and restaurants, and the numbers tell an interesting story about where Americans are putting their dollars.

Technology and personal goods saw particularly strong demand, with spending remaining steady even as people navigated an economic landscape that still feels uncertain. The 4.2% year-over-year increase isn't adjusted for inflation, which matters when we're trying to figure out what's really happening.

Online Shopping Stole the Show, With a New Twist

In-store shopping still dominates the retail landscape, accounting for 73% of total holiday retail payment volume. Online purchases made up the remaining 27%. But here's where it gets interesting: e-commerce was the real growth engine, with online sales surging 7.8% as convenience and early promotional events pulled customers to their screens.

Michael Brown, principal U.S. economist at Visa, told CNBC on Tuesday that consumer spending held up better than expected despite softer confidence levels compared with last year and ongoing inflation-related headwinds.

What's genuinely new about this holiday season? Artificial intelligence entered the shopping equation in a meaningful way. Brown noted that the 2025 holiday season marked a shift in shopping behavior, with AI playing a larger role in how consumers discover products, compare prices, and narrow down gift choices. Roughly half of surveyed consumers reported plans to use AI for those tasks, making it a first for the holiday season.

The Rich Bought More, Everyone Else Got Creative

Electronics led the pack with a 5.8% increase, driven by demand for high-performance devices in the AI era. Apparel and accessories sales climbed 5.3%. General merchandise stores offering one-stop convenience posted a 3.7% increase.

Home-related categories told a different story. Spending on building materials and garden equipment fell 1%, while furniture and home furnishings edged up just 0.8%. Consumers prioritized gifts and gadgets over home improvement projects, which makes sense when you're trying to figure out what to buy everyone on your list.

Brown pointed out that when adjusted for inflation, real spending growth is closer to 2.2%, which he characterized as solid given the level of uncertainty facing consumers. That's a more modest number, but still respectable.

Here's a milestone worth noting: U.S. consumers are on pace to spend over $1 trillion this holiday season for the first time.

Breaking Down the Trillion-Dollar Season

The National Retail Federation expects total sales in November and December 2025 to land between $1.01 trillion and $1.02 trillion, up 3.7% to 4.2% from a year earlier. That trillion-dollar threshold is impressive, but much of that increase reflects higher prices rather than people buying dramatically more stuff.

Economists point to inflation still running around 2% to 3%, along with tariff-related price increases on goods like toys and electronics, as key dollar growth drivers. So when you see that 4.2% spending increase, remember that a chunk of it is just things costing more, not necessarily a shopping frenzy.

The spending story splits along income lines, as these things often do. Higher-income consumers continue to open their wallets, buoyed by stock market gains and rising home values. They're feeling wealthy because, on paper at least, they are.

Lower-income shoppers are proceeding more cautiously, increasingly relying on credit cards and buy-now-pay-later options to stretch budgets through the season. That's a pattern worth watching, because it suggests not everyone is experiencing this "resilient" holiday season the same way.

Price Action: AMZN shares were up 0.25% at $232.71 at the time of publication on Wednesday. WMT was up 0.23%.