New York — After a decade and a half of dominance, Walmart’s reign as the world’s largest company, measured by sales, has ended. Amazon officially surpassed the retail giant in , posting $717 billion in sales compared to Walmart’s $713 billion, a margin that solidified in reports released this week.
The shift isn’t simply a reflection of changing consumer habits, though those certainly play a role. While both companies continue to fiercely compete in the consumer retail space, Amazon’s ascent is fundamentally driven by the explosive growth of its cloud computing division, Amazon Web Services (AWS), alongside its expanding advertising and subscription services.
Jeff Bezos founded Amazon in as an online bookstore, a relatively modest beginning. However, the company’s strategic diversification into cloud infrastructure proved to be a pivotal move. AWS, now a key profit driver for Amazon, generated nearly $129 billion in sales last year, providing a vast network of computing, storage, and artificial intelligence tools for businesses and governments globally. This revenue stream has effectively insulated Amazon from the pressures facing traditional retailers and allowed it to invest heavily in new technologies.
The breakdown of Amazon’s revenue reveals the extent of this diversification. While online and physical store sales, along with revenue from third-party sellers, still constitute the majority – approximately $464 billion – advertising and Prime subscriptions contributed over $100 billion collectively. This contrasts sharply with Walmart, where over 90% of sales originate from its physical stores and website.
The competition between Amazon and Walmart is intensifying, particularly as both companies navigate the evolving landscape of retail technology. Walmart has been actively investing in its own technological capabilities, including an AI-powered shopping assistant and broader retail technology initiatives. However, it lacks a comparable presence in the cloud services market, a critical differentiator in today’s technology-driven economy.
Despite Amazon’s victory in overall sales, Walmart is far from faltering. The company’s stock recently exceeded $1 trillion in value, marking a first for a traditional retailer. Walmart’s recent decision to list its stock on the Nasdaq, rather than the New York Stock Exchange, signals a deliberate effort to rebrand itself as a technology company and attract a different class of investor.
Walmart’s domestic business is currently experiencing a surge, fueled by middle-class and upper-income households seeking value. The company is successfully gaining market share from competitors like Target, demonstrating its continued relevance in the retail sector. According to Walmart’s recent earnings report, US sales grew 4.6% last quarter.
“The pace of change in retail is accelerating,” stated John Furner, Walmart’s new CEO, in a recent statement. “Our financial results show that we’re not only embracing this change, we’re leading it.” This sentiment underscores Walmart’s commitment to adapting and innovating in the face of Amazon’s dominance.
The rivalry between Amazon and Walmart extends beyond mere sales figures. Both companies are actively exploring the potential of artificial intelligence to reshape their operations and enhance customer experiences. Amazon is making significant investments in AI, while Walmart is pursuing strategic technology partnerships. The outcome of this AI race will likely determine the future trajectory of both companies.
The shift in the top spot highlights a broader trend: the increasing importance of technology in driving revenue and market capitalization. While Walmart remains a retail powerhouse with a massive physical footprint, Amazon’s ability to leverage cloud computing and other technology-driven services has propelled it to the forefront of the global economy. This transition signals a fundamental change in the dynamics of the retail landscape and underscores the growing influence of technology companies in all sectors.
The battle for retail supremacy is far from over. Both Amazon and Walmart are demonstrating a willingness to adapt and innovate, ensuring a continued period of intense competition and technological advancement in the years to come.
