Amazon Tops Walmart in Revenue, But AWS is the Real King

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AuthorAditi Singh|Published at:
Amazon Tops Walmart in Revenue, But AWS is the Real King
Overview

Amazon.com Inc. has officially claimed the top spot for annual revenue, surpassing Walmart with $716.9 billion for its fiscal year ending December 2025. This milestone, however, is largely attributed to the powerhouse performance of Amazon Web Services (AWS), which contributed approximately $128.7 billion in sales, a sector where Walmart does not compete. While Amazon's e-commerce scale is immense, attracting 2.7 billion monthly visits, the "revenue victory" highlights the significant impact of its cloud computing division on its overall financial standing, a stark contrast to Walmart's retail-centric model. Investor sentiment, measured by market capitalization, continues to favor technology giants like Nvidia, which holds a market cap exceeding $4.5 trillion, dwarfing both retail behemoths.

The Revenue Crown

Amazon has dethroned Walmart as the world's largest company by revenue, posting $716.9 billion in sales for its fiscal year ending December 31, 2025. This figure narrowly edges out Walmart's reported $713.2 billion for its fiscal year ending January 31, 2026 [2, 16, 20]. For over a decade, Walmart held the top spot, but Amazon's aggressive expansion into cloud computing and e-commerce has reshaped the competitive landscape. Despite this revenue milestone, the narrative is complicated by the sources of Amazon's growth.

The AWS Disconnect

The ascendance is heavily indebted to Amazon Web Services (AWS), which generated approximately $128.7 billion in revenue in 2025 [2]. Without AWS, Amazon's revenue would have stood at $588 billion, placing it behind Walmart in overall sales [1]. This underscores a critical strategic divergence: AWS operates in a high-margin, high-growth sector that Walmart does not directly contest. While Amazon's retail operations attract an estimated 2.7 billion monthly website and app visits, its dominance in the revenue rankings is a testament to the indispensability of cloud infrastructure in the current technological era [1].

Valuation Chasm and Investor Perspective

From an investor's vantage point, sheer revenue size does not equate to market leadership. Nvidia, the leader in AI-driven computing, commands a market capitalization exceeding $4.5 trillion as of February 2026 [1, 3]. This valuation significantly eclipses both Amazon and Walmart, whose market caps stand around $2 trillion (estimated based on P/E and EPS) and approximately $995 billion respectively [16]. Amazon's P/E ratio is around 28.5, while Walmart's is higher at approximately 44-52, and Nvidia's is comparable to Walmart's at around 46-47 [1, 4, 7, 8, 10, 13, 14, 26]. This disparity highlights that while Amazon leads in revenue, its market valuation is more aligned with its overall business scale rather than the hyper-growth potential investors attribute to semiconductor and AI leaders like Nvidia.

The Forensic Bear Case

Amazon's revenue crown, while significant, represents a complex victory. The heavy reliance on AWS for this top-line achievement, coupled with intense competition in its core e-commerce business, presents inherent risks. Unlike Walmart, which has over 10,000 physical stores globally and is making strides in its e-commerce offerings, Amazon's physical retail footprint remains a secondary focus, despite acquisitions like Whole Foods [20]. The sheer scale of Amazon also invites increased regulatory scrutiny, a challenge historically faced by companies like Exxon Mobil and General Motors when they held the revenue top spot. Furthermore, while Amazon's retail business is essential, it has historically operated on thinner margins compared to AWS, meaning profitability is disproportionately driven by its cloud segment. Jeff Bezos, Amazon's founder, though still one of the world's wealthiest individuals with an estimated net worth of over $250 billion as of February 2026, is no longer the world's richest person, having been surpassed by others [11, 44]. This shift underscores that wealth and market dominance are measured by multiple factors beyond mere revenue.

Future Outlook

Analysts maintain a generally positive outlook for both companies, though with different strategic implications. Amazon is rated a consensus 'Strong Buy' by 44 analysts with an average price target of approximately $282, indicating strong conviction in its continued growth trajectory, particularly from AWS and its expanding advertising business [37, 46]. Walmart also holds a 'Strong Buy' consensus from 28 analysts, with an average price target around $133, reflecting confidence in its retail resilience, omnichannel strategy, and growing advertising and cloud services [30, 36]. The ongoing demand for cloud computing and artificial intelligence infrastructure suggests AWS will remain a critical growth engine for Amazon, while Walmart's focus on operational efficiency and customer value positions it to continue capturing market share in the retail sector.

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