In February 2026, Amazon.com Inc. (NASDAQ: AMZN) supplanted Walmart Inc. (NASDAQ: WMT) as the world’s largest company in terms of revenue. This wasn’t a surprise to industry observers, but it was reinforced when Fortune confirmed the results, placing Amazon at the top of its Fortune 500 list.
The news isn’t having much impact on either stock’s price. As of June 8, both stocks are up a little more than 6% for the year.
But over a longer horizon, it’s Walmart that has rewarded shareholders with a larger total return.
That’s a story that’s likely to continue for a reason that may surprise some investors. The death of physical retail has been greatly exaggerated, and it's an arena where Amazon simply doesn't compete with Walmart.
Yet even that edge doesn't fully capture the real story: Walmart may be a stronger proxy for technology stocks than Amazon is a proxy for retail stocks. If that's right, Walmart doesn't just merit a premium valuation—it may need to be rerated entirely.
Walmart’s Physical Moat Is a Digital Advantage
Amazon essentially created the category of e-commerce. So it makes sense that the company has an almost impenetrable lead among online shoppers. But Walmart has made strides in closing that gap, and in doing so, it’s showing why its business model has some advantages.
First, the company’s retail footprint of over 4,600 stores doubles as fulfillment nodes, without the added expense of building new facilities. This enables curbside pickup, which has become a habit-forming tool for shoppers. Plus, the company can use those stores for same-day delivery, which Amazon can’t match on unit economics.
Walmart Connect (Advertising) Is the Margin Story
The most underappreciated line item in Walmart's financials may come from Walmart Connect, the company's U.S. retail media platform. In fiscal year 2026 (FY2026), Walmart Connect generated $6.4 billion in global ad revenue, a 46% YOY increase. In the most recent quarter, Walmart Connect grew 44% domestically, a rate that dwarfs the company's low-single-digit top-line growth.
This has a significant impact on the bottom line. CFO John David Rainey has noted that advertising and membership income now account for roughly one-third of Walmart's operating profit. High-margin ad dollars are effectively subsidizing the lower-margin retail operation, a dynamic Wall Street recognized years ago when it rerated Amazon's multiple upward on the strength of its ad segment.
Even more noteworthy, Walmart is still in the early innings. Its advertising revenue represents roughly 1% of gross merchandise value, compared to approximately 8% for Amazon. That gap gives the company, and WMT, a long runway—and investors who wait for Walmart's ad business to mature before repricing the stock may find themselves late to the trade.
Sam's Club as the Proof of Concept
If you want to see where the Walmart flagship is heading, look at Sam's Club. The $90 billion warehouse division has become the clearest demonstration that digital engagement and physical retail aren't in conflict.
Membership income posted double-digit growth for five consecutive quarters through Q4 2025, with digital penetration hitting an all-time high. Scan & Go adoption—the app-based checkout feature that lets members skip the register entirely—surged 500 basis points in a single quarter, and roughly 40% of Sam's transactions are now digital.
The Grapevine, Texas, prototype club runs at 100% Scan & Go participation. Members who shop digitally visit three times more often, buy across twice as many categories, and renew their memberships at meaningfully higher rates.
Sam's Club has announced plans to remodel all 600 of its existing locations while opening approximately 15 new clubs per year, with a stated goal of doubling membership over the next decade.
The Chart Points to an Inflection Point
WMT dropped approximately 7% the day of its Q1 earnings report for FY2027. The report showed a solid double beat with high single-digit year-over-year (YOY) gains. The point of contention was the guidance, as it was with many retailers.
Specifically, Walmart is facing the unknown of higher tariff-related costs and what that could mean for its core customer. That said, the sell-off found a floor right around the 200-day simple moving average (SMA).
Analysts remain generally bullish on WMT with a consensus price target of $138.85. That’s about 15% above the price as of this writing. It would also reconfirm the highs the stock made in February and May of this year.
2 Great Stocks—Totally Different Purposes
AMZN has been a wonderful stock for long-term investors, and it will continue to be in the future. However, this is a case of knowing where revenue growth is coming from. For Amazon, that increasingly means Amazon Web Services (AWS), which accounted for $128.7 billion in revenue in 2025.
Amazon still delivered $588.2 billion from its retail-related sales, but that number is well below Walmart, which comes from its blend of physical locations and growing digital efforts.
The reliance on retail is a reason that Walmart pays a dividend and Amazon does not. But even though that dividend is modest, it’s a safe payout that has increased for 53 consecutive years. And this year will make 54. After its stock split in January 2024, WMT is attractively priced for investors to start accumulating and letting the impact of compounding work to their advantage.