Walmart (WMT -1.22%) and Amazon (AMZN -1.45%) are the two largest U.S. companies by sales, in that order. However, Amazon is closing the gap and is likely to soon overtake Walmart.
You might think it's obvious that Amazon, with all of its artificial intelligence (AI), is the better buy today. But not so fast. Let's see why it may not be as simple as you think.
The case for Amazon: AI
Amazon is the largest e-commerce company in the country, and it's also the largest cloud computing company in the world. These twin businesses make it a formidable enterprise that's hard to beat, and both of these industries are fast-growing, providing incredible organic growth opportunities.
But it's much more than organic growth opportunities, and much more than e-commerce and cloud computing. Let's start with AI, since that's what's on everyone's mind today. CEO Andy Jassy said that the AI business is already bringing in billions of dollars, and he thinks it's just the beginning.
He believes that the cloud business has barely been cracked open, and he envisions companies turning toward cloud solutions at levels we can't really imagine right now. Amazon is heavily investing in all kinds of AI to be ready for that shift, and it could be a game-changer for the company.
It's still tops in e-commerce, by far, accounting for more than a third of all U.S. e-commerce. Walmart is second, but it has only about 6% of the total. Amazon could be widening its lead by upgrading its systems, such as introducing new robotics technology that's cutting processing time by 25%. It's constantly improving speed and expanding its same-day delivery coverage, generating loyalty from Prime members and ensuring they keep shopping at Amazon.
It has a competitive streaming service, a robust advertising business that's generating billions quarterly, and plenty of other segments like healthcare and devices that create an unmatched business enterprise.
The case for Walmart: Value
Walmart has 4,600 stores in the U.S. and about 10,600 worldwide under different local banners. Despite its size, it consistently reports growth in sales and profits. That's because, like Amazon, it is constantly upgrading its platform and finding ways to renew itself and resonate with its client base.
One way it's doing that these days is through its digital channels. Although it's way behind Amazon in e-commerce, it has a significant advantage in its store network. It can provide omnichannel options that Amazon can't, and customers are increasingly embracing the omnichannel model.
It also gives Walmart exposure to more people, and a more affluent consumer, since it can offer a greater selection of products outside of essentials online that appeal to this type of shopper. Walmart's e-commerce sales increased 27% year over year in the 2025 fiscal third quarter (ended Oct. 31).
Investors should also consider Walmart's dividend. It's not the highest-yielding dividend, but it's stable and growing. It yields 0.9% at the current price, lower than usual because the stock is so high.
Which one has performed better?
Depending on when you go back to, Walmart and Amazon have outperformed at different times. Walmart is much older than Amazon -- it went public in in 1970, giving it a 27-year head start on Amazon. That translates into a market-crushing gain of 677,000%. Amazon, since its initial public offering in 1997, has gained 232,000%.
That's the past, but my point is that it isn't so clear that Amazon has easily crushed Walmart over time. In fact, although it has gained triple Walmart stock's gain over the past 10 years, they have delivered the same gain over the past five years, and Walmart has outperformed over the past three years.
Amazon's perceived edge from AI may not be as valuable to the market as Walmart's stability and retail power. In fact, despite Amazon's strong performance this year and enthusiasm about AI, Walmart is beating it as we close out the year:
AMZN total return level; data by YCharts.
Let's compare recent performance.
| Metric | Q3 24 | Q2 24 | Q1 24 | Q4 23 |
|---|---|---|---|---|
| Amazon sales growth | 11% | 10% | 13% | 14% |
| Walmart sales growth | 5.5% | 4.8% | 6% | 5.7% |
| Amazon operating income growth | 55% | 91% | 218% | 389% |
| Walmart operating income growth | 8.2% | 8.5% | 9.6% | 30.4% |
Data source: Amazon and Walmart quarterly reports. Walmart's quarters are for the fiscal year 2025.
Even though Amazon has been performing better, the market is valuing Walmart's consistency and value right now. Amazon has a real advantage in AI, but Walmart has a real edge in its stability.
I would say that if you're looking for growth and have more of an appetite for risk, Amazon is still your stock, even though Walmart is outperforming it this year. If you're looking for value and passive income, Walmart is your choice, and its stock performance isn't too shabby, either.
