Walmart vs Amazon

By Douglas A. McIntyre Published Feb 21, 7:15AM EST

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Walmart vs Amazon — © Walmart (CC BY 2.0) by Mike Mozart

Walmart Inc. (NYSE: WMT | WMT Price Prediction) announced strong earnings, and its strategic moves in the past year have impressed investors. Its shares are up 32% in the past year, while the S&P 500 is higher by 20%. However, the stock of its primary rival, Amazon.com Inc. (NASDAQ: AMZN), has risen 72% over the past two years. Much of this gain happened in 2024.

Walmart’s revenue in the most recent quarter was up almost 6% to $173 billion. Earnings dropped 12% to $2.03 per share. E-commerce rose 23%, and ad revenue rose an impressive 28% to 33%. Despite this advertising revenue increase, Walmart has a long way to go. Amazon holds about 12% of the digital advertising revenue in the United States, behind Meta (20%) and Google (28%). (Eleven things to never buy at Walmart.)

Walmart remains primarily a brick-and-mortar retailer, albeit the largest one in the United States. Its valuation reflects the legacy costs of operating in buildings with a large number of employees. The company has over a million workers in the United States. It cannot transform its business enough to escape that fact, which will cap its valuation in terms of market cap to revenue. Amazon trails Walmart in revenue, but its market cap is $475 billion, and Amazon’s is $1.74 trillion.

Finally, Amazon has Amazon Web Services (AWS), the largest cloud computing business in the United States. Cloud computing operations tend to get higher multiples than retail. Some analysts would say AWS is worth as much as Amazon’s retail business. If so, that would explain the valuation difference between Walmart and Amazon.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.