Amazon Set to Overtake Walmart in Revenue Race
Amazon is on track to surpass Walmart as the world's largest company by revenue, marking a historic shift in the retail landscape. The Seattle-based tech giant reported $716.9 billion in revenue for 2025, up 12% from the previous year and ahead of Wall Street expectations.
Walmart is expected to report approximately $712 billion in revenue when it releases earnings later this month. If Amazon's lead holds, it will be the first time the company has topped Walmart on an annual revenue basis.
Milestone Builds on Recent Wins
While Amazon has surpassed Walmart before, annual revenue represents a particularly significant benchmark. The company first exceeded Walmart in quarterly revenue last year, ending a 12-year streak for the Bentonville, Arkansas-based retailer.
Amazon has also maintained a higher market capitalization than Walmart since 2015. Its current market cap stands above $2.5 trillion.
But annual revenue carries a unique weight. Walmart built its identity on scale, logistics, and operational efficiency. Amazon's matching and potentially exceeding that figure underscores how dramatically retail has evolved over the past decade.
Different Business Models Make Comparison Complex
The revenue comparison, while headline-grabbing, obscures fundamental differences between the two companies. Walmart remains primarily a retailer, while Amazon operates multiple high-margin businesses alongside its e-commerce platform.
Amazon Web Services, the company's cloud computing division, generated $35.6 billion in revenue during the fourth quarter alone, representing 24% year-over-year growth. The company's advertising business grew 22% during the same period.
These high-margin segments allow Amazon to operate its retail business with thinner profit margins while still growing overall earnings. The diversified model transforms retail from the sole profit driver into one component of a broader flywheel.
Amazon Bets Big on Artificial Intelligence Infrastructure
Looking ahead, Amazon plans to invest heavily in emerging technologies. The company expects capital expenditures to reach $200 billion in 2026, with most funds allocated to AWS infrastructure supporting artificial intelligence workloads.
CEO Andy Jassy emphasized strong demand for both core cloud services and AI capabilities, saying the company is racing to install capacity quickly enough to meet customer needs.
Wall Street responded cautiously to the spending plans, with Amazon's stock declining sharply following the earnings announcement. However, the strategy follows a familiar pattern for the company: invest aggressively now to establish dominance later.
Walmart Accelerates Digital Transformation
Walmart has responded to Amazon's challenge with its own digital initiatives. The retailer's e-commerce business is now growing faster than Amazon's, and its same-day delivery service reaches 93% of U.S. households.
The company's advertising platform, Walmart Connect, reported 33% year-over-year growth. Walmart is also investing in artificial intelligence, including a partnership with Google to feature Walmart products within the Gemini assistant.
Grocery represents a key battleground. Walmart continues to lead in grocery e-commerce, while Amazon experiments with faster delivery options, Prime member incentives, and 30-minute delivery pilots. The company has also refocused its physical retail strategy around Whole Foods Market.
Broader Implications for the Retail Industry
If Amazon officially surpasses Walmart in annual revenue, it will confirm that retail dominance now comes from building ecosystems rather than simply operating stores or managing inventory.
For brands selling through these platforms, the shift means navigating increasingly complex, technology-driven marketplaces. Both Amazon and Walmart are converging on similar capabilities while maintaining distinct competitive advantages.
The competition between the two companies will continue to shape pricing dynamics, fulfillment expectations, advertising costs, and growth opportunities across the retail sector.
While the ultimate winner of this rivalry remains unclear, one conclusion is certain: the era of companies succeeding as pure retailers has ended.
