Walmart Inc. (NYSE: WMT) has crushed its brick-and-mortar rivals, which includes its strength in the grocery store sector. It is, by most measures, the second-largest e-commerce retailer in America. However, investors do not think it will ever catch Amazon.com Inc. (NASDAQ: AMZN), which has something Walmart never will: a huge cloud computing business. (These are 17 awful investments made by Amazon.)
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In its most recently recorded quarter, Walmart’s revenue rose 5.7% to $161 billion, making it the largest American company based on that yardstick. Walmart’s e-commerce revenue rose 24% year over year. The number is meaningless since Walmart does not disclose revenue for this business, which suggests that the numbers are not impressive.

Walmart management said grocery operations fueled its success. This was called out in the most recent earnings release: “Gained market share in grocery with strong unit growth.” Once again, the numbers are murky, but industry experts say Walmart’s figures are better than Kroger’s, the largest grocery chain in America. Axios puts Walmart’s share of the national grocery business at 25% and Kroger’s at 6%.

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Amazon’s retail business had revenue of $113 billion in the past quarter, up 12%. That is a slowdown of the ridiculous growth rate a decade ago, but still unmatched in revenue in the e-commerce sector. Many investors still believe that a company without the costs of stores is better off than companies that have them.

Amazon’s real engine is its cloud business. In the most recent quarter, Amazon Web Services grew 12% to $22.1 billion. Its margin was an extraordinary 24%.

Wall Street’s preference is clear. Amazon’s shares are up 70% this year, while Walmart’s are only 16% higher.

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