Walmart Inc. (NYSE: WMT) shares were attractive as the first wave of the COVID-19 pandemic hit the U.S. Its e-commerce business surged. Curb-side pick up became popular. Some research shows that 90% of Americans live within 10 miles of a Walmart store. Its 4,756 stores gave it a massive advantage for its curbside operation. Then, two things happened. Smaller competitors started to re-open stores, close for weeks. Amazon.com’s (NASDAQ: AMZN) long term strength, pandemic or not, re-emerged as a substantial advantage.
For the year, Walmart’s shares are higher by less than 1%. Amazon’s are higher by 56%. Amazon’s market cap is $1.4 trillion. Walmart’s is $337 billion.
In the first quarter, Walmart impressed investors. Ecommerce results were 74% higher, to a large extent due to grocery pick up. The U.S. revenue rose 10% to $89 billion. Comparable store sales rose by about the same percentage points. Management said it had hired 350,000 new “associates” which was another sign of demand.
Amazon.com’s figures were even better. North American revenue was $46.1 billion, and the comparison with the previous year’s quarter was up by 28.8%. The difference in the growth rates between the two companies showed Amazon’s advantages. Whether people could come to physical stores or not, Amazon’s numbers showed the extent to which online retail continued to batter companies with stores.
Additionally, if the spread of COVID-19 persisted, or grew, Amazon could press its advantage even more, as a large portion of the nation went through waves of lockdowns.
Some researchers believe that part of Amazon’s appeal is its cloud business, Amazon Web Services. It is No.1 in the cloud sector in American. It is a reasonable point of view. Revenue for AWS rose 32% to $10.7 billion. On the bottom line, the figure rose 38% to $3.1 billion. The value of the segment is in the billions of dollars, but Amazon, at its core, is still an e-commerce company. Investors, who looked at Walmart and Amazon did not forget that.
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