Chewy (Chewy (CHWY)) had a rough Tuesday. The pet e-commerce company's stock dropped to a new 52-week low of about $19.74, and there wasn't any big news to blame. No earnings miss, no scandal—just a quiet slide in a market that's also slightly down (the Nasdaq and S&P 500 are both off by less than 0.3%).
So what's going on? Part of it is the hangover from a cautious analyst call. On May 12, Citigroup kept its buy rating on Chewy but slashed its price target to $37. That's still well above where the stock is trading, but the cut probably didn't help sentiment.
But here's the thing: a lot of analysts are actually pretty bullish on Chewy's long-term story, especially around artificial intelligence. Guggenheim's Steven Forbes reiterated a buy rating and a $45 price target, pointing to automated cost savings. He said, "We see the potential for 30-40 basis points of fulfillment cost leverage in 2026." And management has talked about AI-related efficiency benefits of "low tens of millions of dollars" this year, which Forbes thinks could "set the stage for significant G&A expense leverage."
Needham's Bernie McTernan also chimed in, though he's more cautious with a hold rating. He focused on Chewy's Autoship program, which now makes up 84% of sales. "Autoship strength continues to drive predictable, recurring demand," he said. McTernan also noted that Chewy is "among the first in our coverage to quantify the efficiency gains from AI," specifically in customer service, fulfillment, pharmacy, and marketing.
So the business fundamentals seem solid—recurring revenue, AI-driven cost cuts—but the stock chart tells a different story. Chewy is trading 18.1% below its 20-day moving average ($24.30) and a whopping 37.6% below its 200-day moving average ($31.89). That's a lot of technical damage. The 20-day is below the 50-day, which is bearish, and there's a death cross (50-day below 200-day) that formed back in November 2025. Sellers have been in control for a while.
Worse, the stock has now broken below its prior 52-week low of $21.03. That old floor could become a ceiling if the stock tries to bounce back. Over the past 12 months, shares are down 54%, so any rally tends to get sold into quickly.
Key levels to watch: resistance at $21.03 (the old low) and support at $19.90 (near today's low). If Chewy can't hold that support, things could get uglier. But if the AI efficiencies and Autoship revenue start to matter more to investors, the stock might find a floor.
At publication time, Chewy shares were down 8.55% at $19.77.
