Walmart Inc.

(New York Stock Exchange)
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Somewhat Bullish +40

Walmart Lost This Key Title to Amazon for the First Time in Company History -- Is It Still a Buy?

AI-generated analysis

πŸ† Amazon surpassed Walmart to become the world's most valuable company by revenue for the first time in history, with $716.9 billion in sales compared to Walmart's $713.2 billion.

πŸ’° While Amazon's total revenue now leads, Walmart remains larger than Amazon when comparing only their core retail business units.

πŸš€ Walmart is investing heavily in robotics and artificial intelligence through partnerships like Symbotic to improve efficiency and compete with e-commerce trends.

πŸ“Š Walmart generated $6.4 billion from digital advertising last year, representing a 46% revenue increase for that specific category.

πŸ’΅ The stock trades at approximately 45 times expected earnings and has risen about 32% over the past year despite a modest dividend yield of 0.8%.

⚠️ Analysts note that while Walmart has strong foundations and automation potential, its current valuation premium makes it appear expensive relative to its growth rate.

πŸ€– Amazon is expected to likely outperform Walmart over the next decade due to its high-margin cloud services business and broader tech ecosystem.

🏬 Walmart's retail sector remains resilient against e-commerce headwinds thanks to its massive and efficient physical supply chain network.

πŸ“ˆ The company reported a 5% currency-adjusted revenue increase last year alongside a 10.8% rise in non-GAAP operating income.

🀯 The article promotes The Motley Fool's Stock Advisor service, which claims high historical returns but explicitly excluded Walmart from its current top 10 stock list.

Bullish Signals
  • Walmart recorded $713.2 billion in revenue during its fiscal year ended Jan. 30, 2026, demonstrating massive scale and market dominance.
  • Walmart's retail units alone are still bigger than Amazon's by revenue, proving the tech giant's success is partially due to high-margin non-retail segments like AWS and digital advertising.
  • The company is experiencing strong growth in its digital-advertising business, with category revenue rising 46% to reach $6.4 billion in its last fiscal year.
  • Walmart boasts one of the largest and most efficient supply chains and distribution networks in the world, providing significant resilience against industry headwinds.
  • The company is actively investing in automation, such as a close partnership with Symbotic for robotics and AI, which could unlock major efficiencies and deliver big long-term wins.
  • Walmart stock has marched roughly 32% higher over the past year despite trading at a premium valuation, reflecting strong investor confidence.
  • The company maintains an impressive track record of delivering payout growth, having raised its dividend annually for 53 consecutive years.
  • Even with a substantial revenue increase of approximately 5% on a currency-adjusted basis, Walmart saw non-GAAP operating income rise by 10.8%, highlighting strong profitability.
Risk Factors
  • Walmart lost its title as the world's most valuable company by revenue for the first time in history, falling behind Amazon which recorded $716.9 billion in sales compared to Walmart's $713.2 billion.
  • Despite strong overall growth, Walmart commands a substantial valuation premium, trading at roughly 45 times this year's expected earnings.
  • The stock carries a high risk as it trades at a premium that makes it difficult for investors to expect significant returns without major efficiency unlocks.
  • Walmart pays a low dividend yield of approximately 0.8%, offering less income cushion compared to other large-cap retailers.
  • Analysts from The Motley Fool Stock Advisor specifically excluded Walmart from their top 10 list of best stocks to buy, citing superior opportunities like Netflix and Nvidia in historical comparisons.
  • There is a concern that Amazon will likely outperform Walmart over the next decade due to its higher-margin cloud services business and stronger focus on high-tech categories.
Full Analysis
Walmart has been surpassed by Amazon for the first time in history to become the world's largest company by revenue, with Amazon recording $716.9 billion in sales for its recent fiscal year compared to Walmart's $713.2 billion for its fiscal year ending Jan. 30, 2026. While this milestone highlights Amazon's continued dominance due to high-growth segments like cloud services and digital advertising, the article notes that Walmart remains a retail powerhouse with a robust supply chain and resilient physical presence. Specifically, when comparing only their core retail units excluding non-retail technology divisions, Walmart still holds a larger revenue base, though its non-GAAP operating income grew 10.8% last year while revenue rose 5%. To compete with digital rivals, Walmart is actively investing in robotics and artificial intelligence through partnerships like Symbotic to improve supply chain efficiency. Financially, the stock has appreciated roughly 32% over the past year but trades at a premium valuation of approximately 45 times expected earnings for the current year, alongside a modest dividend yield of 0.8%, though the company has increased its payout annually for 53 consecutive years. The author concludes that while Walmart is a strong company with potential for significant returns if automation initiatives deliver major efficiencies, the high valuation and lack of cheapness make it less attractive than other opportunities currently identified by analysts, such as those in Stock Advisor's top ten list which does not include WMT.