Deep Dive: Amazon Dethrones Walmart as the World's Largest Company by Revenue — What It Means for Investors and the Future of Retail

Amazon's ascent to the top of the revenue rankings is a story of relentless diversification. While its core online retail operation remains the single largest revenue contributor, the company has built enormous secondary engines that Walmart simply cannot match. In fiscal 2025, Amazon Web Services accounted for roughly 18% of total revenue, while third-party seller services — encompassing fulfillment fees, shipping, advertising, and customer support — contributed approximately 24% of sales.

The numbers tell a compelling growth story. Amazon's quarterly revenue trajectory over 2025 showed consistent acceleration: $155.7 billion in Q1, $167.7 billion in Q2, $180.2 billion in Q3, and $213.4 billion in the holiday-heavy Q4. Full-year revenue of $716.9 billion represented a 12.4% increase over 2024's $637.8 billion — a remarkable growth rate for a company of this scale.

Profitability has improved even more dramatically. Amazon's gross profit margin expanded to 50.3% for the full year 2025, up from 48.9% in 2024 and 47.0% in 2023. Net income surged to $77.7 billion in 2025, compared to $59.2 billion in 2024 and just $30.4 billion in 2023 — a staggering 155% increase in two years. Diluted EPS for 2025 came in at $7.16, nearly double the $3.00 level of just two years ago.

It would be a mistake to read Amazon's coronation as evidence of Walmart's decline. The Bentonville giant reported fiscal Q4 revenue of $190.7 billion, beating Wall Street's estimate of $190.4 billion, with adjusted earnings per share of $0.74 versus the $0.73 consensus. Full-year revenue of $713.2 billion represented solid growth from the prior year's $681.0 billion — a 4.7% increase that many retailers would envy.

More importantly, Walmart's digital transformation is accelerating. U.S. e-commerce sales surged 27% year-over-year in Q4, marking the company's 15th consecutive quarter of double-digit digital growth. E-commerce now accounts for a record 23% of Walmart's U.S. sales. Store-fulfilled deliveries grew approximately 50%, and Walmart Connect, its advertising business, saw revenue jump roughly 41%. These are not the numbers of a company being left behind.

Walmart's appeal to higher-income consumers is also expanding. CFO John David Rainey noted that market share gains among upper-income households outpaced those in other segments. In fashion, nearly all of the mid-single-digit growth came from households earning over $100,000 annually. The company's market cap crossed the $1 trillion threshold earlier this month, and it recently moved its stock listing from the NYSE to the Nasdaq — a deliberate signal of its tech-company aspirations. A new $30 billion share repurchase authorization announced Thursday further underscored management's confidence.

Perhaps the starkest divergence between the two companies lies in their approach to artificial intelligence. Amazon has committed to spending up to $200 billion on AI initiatives in 2026 — more than any other hyperscaler and a sum that dwarfs Walmart's entire annual capital expenditure budget. Most of this spending will flow to data centers, custom chips, and networking infrastructure for AWS, which powers not just Amazon's own AI tools but a vast ecosystem of enterprise clients.

Amazon's consumer-facing AI bet centers on Rufus, its shopping assistant powered by in-house models and Anthropic's Claude. The company says Rufus has been used by over 300 million customers and drove nearly $12 billion in incremental annualized sales last year. Amazon has also invested $8 billion in Anthropic since 2023 and has blocked third-party AI agents from accessing its platform, betting that keeping the AI shopping experience in-house will deepen its competitive moat.

Walmart's approach is fundamentally different — and arguably more capital-efficient. Rather than building AI infrastructure from scratch, Walmart has partnered with OpenAI's ChatGPT and Google's Gemini to enhance product discovery and purchasing. Its own AI assistant, Sparky, is already embedded in the Walmart app, and CEO John Furner revealed that customers using Sparky have an average order value approximately 35% higher than non-users. About half of Walmart's app users have tried the tool. Walmart's total capital expenditure is expected to be roughly 3.5% of sales for the full year, covering AI, automation, and store remodels — a fraction of Amazon's AI spend alone.

Wall Street has punished Amazon for its massive capex plans, with shares falling for nine consecutive days after the February 5 earnings report and losing more than $450 billion in market value. Amazon currently trades at $209.44, well below its 52-week high of $258.60 — a 19% discount that some analysts view as an opportunity.

Despite Amazon's larger revenue and vastly superior profitability, the two stocks present investors with a genuine choice. Amazon trades at a P/E ratio of 29.3x on trailing earnings of $7.16 per share — a premium, but one that looks increasingly reasonable given the company's growth trajectory. Its EV/EBITDA multiple stands at 15.4x, and return on equity reached 18.9% in 2025.

Walmart, by contrast, commands a P/E of 42.7x — a significant premium to Amazon that reflects the market's confidence in Walmart's transformation story but also leaves less room for error. Walmart's net profit margin of 3.1% is a fraction of Amazon's 10.8%, and its ROE of 22.0% edges out Amazon's, though largely driven by higher financial leverage rather than operating superiority.

The forward outlook adds another dimension. Walmart guided for fiscal 2027 adjusted EPS of $2.75 to $2.85, well below the Street consensus of $2.96 — a miss that triggered a 2.2% decline in shares on Friday and an HSBC downgrade from buy to hold. Amazon, meanwhile, is expected to continue delivering strong earnings growth, though the massive capital expenditure cycle creates near-term uncertainty around free cash flow. Amazon's free cash flow plunged from $32.9 billion in 2024 to just $7.7 billion in 2025 as capex surged to $131.8 billion from $83.0 billion.

The revenue crossover is ultimately a reflection of how Amazon has redefined what a commerce company can be. Walmart generates the vast majority of its revenue from selling goods — grocery, general merchandise, apparel — through physical stores and increasingly digital channels. Amazon does that too, but also runs the world's largest cloud computing platform, one of the fastest-growing digital advertising businesses, a sprawling logistics network that now serves third-party sellers, and a growing suite of entertainment properties.

This diversification gives Amazon structural advantages in margin expansion and growth optionality. But it also creates complexity and capex intensity that Walmart avoids. Amazon's total assets ballooned to $818 billion in 2025 from $527.9 billion in 2023, driven largely by property, plant, and equipment that reached $357 billion. Walmart's asset base is comparatively stable at $284.7 billion.

The competitive dynamic between these two companies is also reshaping the broader retail landscape. Walmart's embrace of third-party marketplace sellers, advertising revenue, and AI-powered shopping mirrors Amazon's playbook — but executed through the unique advantage of 4,600+ physical stores that double as fulfillment centers. Amazon, meanwhile, has expanded into grocery with Whole Foods and Amazon Fresh, encroaching on Walmart's core territory. The rivalry is intensifying, not settling.