Amazon Dethrones Walmart as World's Largest Company by Revenue

Amazon has officially become the world's largest company by annual sales, surpassing Walmart's long-held position as the revenue leader. For the year ending December, Amazon reported a staggering $716.9 billion in revenue. In comparison, Walmart reported $713.2 billion for the year ending January. This monumental shift ends Walmart's reign, a status it maintained for approximately a decade to 13 years.

This shift is primarily attributed to Amazon's technology divisions, particularly Amazon Web Services (AWS), alongside both companies' expanding efforts in online retail and artificial intelligence.

In terms of market valuation, Amazon's market value exceeded $2 trillion in 2024. Walmart recently achieved its own milestone, surpassing $1 trillion in market value, a significant achievement for a traditional retailer.

Key Growth Drivers and Business Models

Amazon's ascendancy is largely driven by its powerful technology division, Amazon Web Services (AWS), a leading provider of cloud computing services. AWS recently reported its fastest growth in years, primarily fueled by companies leveraging its data centers for artificial intelligence initiatives. Founded by Jeff Bezos in 1994 as an online bookstore, AWS generated nearly $129 billion in sales last year, offering computing, storage, and AI services globally, and serving as a primary profit driver for Amazon.

The majority of Amazon's overall revenue, approximately $464 billion in the past year, stemmed from sales across its online and physical stores, as well as from third-party sellers. Additionally, Amazon accumulated over $100 billion from advertising and Prime subscriptions, diversifying its income streams.

Walmart, while not directly competing in cloud services, is actively engaging in the AI sector through its own shopping assistant and strategic investments in retail technology. Over 90% of Walmart's sales are derived from its expansive network of physical stores and robust websites. Walmart reported a significant 24% growth in online sales and an expansion of its rapid delivery services, including options for delivery within hours, demonstrating its commitment to e-commerce.

Both retail giants are intensifying their competition in the U.S. market. Amazon's strategy continues to focus on offering low prices, while Walmart has observed and noted high-income shoppers as its fastest-growing customer segment, indicating a shift in its customer base.

Market Presence and Strategic Shifts

Walmart operates nearly 11,000 stores and employs over 2 million individuals globally. Amazon, primarily an online retailer, employs 1.6 million people but has faced challenges expanding its physical store presence despite acquiring Whole Foods in 2017.

Walmart has been implementing aggressive strategies to enhance its position as a technology-focused competitor. This includes switching its stock exchange to Nasdaq and significantly increasing investments in artificial intelligence (AI). The company has also outlined plans to reduce 1,500 corporate jobs as part of a restructuring effort. AI and technology are expected to facilitate growth at a lower cost by addressing inventory and labor, which are its largest expenses.

Walmart CEO John Furner stated that "technology and AI are being utilized to create customer solutions, reduce friction, simplify decision-making, and pinpoint inventory while maintaining customer trust."

Economic Landscape and Consumer Trends

Walmart has observed a notable increase in patronage from households earning over $100,000. CEO John Furner reiterated that the majority of share gains came from higher-income households. Conversely, households earning below $50,000 continue to experience financial strain, with some managing spending paycheck to paycheck. This trend aligns with what some experts refer to as a K-shaped economy, where wealthier individuals benefit from stock market gains and higher wage growth, while lower-income households face difficulties balancing income with rising expenses for necessities. Other discount retailers, such as Dollar Tree and Aldi, have also reported increased patronage from higher-income shoppers.

Labor market data for 2025 indicated minimal job growth, with ongoing uncertainty regarding the return of robust job growth. Prices in January rose 2.4% compared with a year earlier, exceeding the Federal Reserve's 2% target but at a slower rate than in previous months. Walmart executives expressed caution regarding the future, citing factors such as a so-called hiring recession, lower consumer sentiment, and student loan delinquencies.

Consumers have experienced price increases on many goods due to tariffs imposed on major U.S. trading partners. An analysis from the Federal Reserve Bank of New York indicated that consumers and businesses absorbed nearly 90% of these tariff costs. Walmart's Chief Financial Officer, John David Rainey, stated that tariff-driven inflation is nearing its peak, a perspective that contrasts with recent comments from Amazon CEO Andy Jassy.

Walmart's Recent Performance and Outlook

Walmart's U.S. business has experienced consistent growth, driven by middle-class and upper-income households seeking to reduce expenses, leading to an increase in market share against competitors. The company announced that same-store sales for its U.S. business increased by 4.6% in the quarter ending January 31, surpassing analysts' expectations. Despite this strong performance, Walmart's stock experienced a nearly 1.4% decline as its profit forecast for the year came in below Wall Street's estimates, tempering investor enthusiasm.