Full Breakdown
Amazon vs. Walmart: A Trillion-Dollar Showdown
2/23/2026, 7:58:19 PM
Core Event: Revenue Competition Between Amazon and Walmart
The competition between Amazon.com, Inc. and Walmart Inc. has intensified as Amazon recently surpassed Walmart to become the largest U.S. company by revenue, reporting $717 billion in sales for 2025 compared to Walmart's $713.2 billion. This shift highlights the contrasting growth trajectories of both companies, particularly in their respective sectors.
Diverging Growth Trends
While Walmart has demonstrated solid earnings growth, with a 5.1% increase in revenue on a constant currency basis and a 24% rise in e-commerce sales, its future projections indicate a slowdown. Walmart's management has guided for approximately 4% sales growth and earnings per share (EPS) growth of 4% to 8%, which analysts view as modest given the stock's current valuation of around 45 times fiscal 2027 earnings. In contrast, Amazon's growth is largely driven by its Amazon Web Services (AWS) segment, which saw a 24% acceleration in growth last quarter, contributing significantly to its revenue. Without AWS, Amazon's revenue would have been $588 billion, indicating that its lead over Walmart is heavily reliant on cloud computing.
Analyst Perspectives on Stock Valuation
Analysts have differing views on the stock valuations of both companies. For Amazon, analysts from JPMorgan and BMO Capital have maintained positive ratings, with price targets set at $265 and $310, respectively. They emphasize the importance of AWS growth and the company's strong demand as key factors supporting its valuation. Conversely, Walmart's stock is perceived as expensive relative to its growth potential, with analysts noting that investors are paying a premium for single-digit growth.
Criticism & Opposition: Perspectives on Market Position
Critics argue that Amazon's revenue lead is misleading, as it primarily stems from its AWS division, which Walmart does not compete in. Kirthi Kalyanam, executive director of the Retail Management Institute, remarked, “This is a hollow victory. Amazon didn’t beat Walmart in the retail game. It just beat them in revenue by launching a new business Walmart doesn’t operate in.” This sentiment underscores the debate over the true nature of competition between the two giants.
Official Statements & Responses
Suresh Kumar, Walmart’s global chief technology officer, acknowledged the growing importance of AI in retail, stating, “Customers are ready. They are using AI in pretty much everything they do.” This indicates Walmart's commitment to integrating AI into its operations, although it still lags behind Amazon's extensive infrastructure investments in this area.
What's Next: Future Outlook for Both Companies
Looking ahead, both companies are expected to focus on their respective growth strategies. Amazon's significant $200 billion capital expenditure plan for 2026 aims to bolster its AWS capabilities, while Walmart is pursuing aggressive AI initiatives to enhance its retail operations. The ongoing competition will likely shape the landscape of the retail and cloud computing markets in the coming years.
