Is it official? Amazon has been chasing Walmart for years, hoping to become the world’s largest company by sales. Although Amazon usually sees quicker sales growth, Walmart has maintained its lead so far. But that could change after Amazon’s impressive fourth quarter.
Amazon’s sales grew by 10% year-over-year. That’s remarkable for such a large company. Actually, it’s unprecedented because Walmart hasn’t reported double-digit growth in a long time. In the fourth quarter, Amazon brought in a whopping $187.8 billion. Here’s where that money came from:
- $75.6 billion from online stores
- $47.5 billion from third-party sellers
- $28.8 billion from Amazon Web Services (AWS)
- $17.3 billion from advertising
- $11.6 billion from subscription services
- $5.6 billion from physical stores
- $1.6 billion from other sources
Despite this growth, Amazon’s outlook for the first quarter disappointed some investors, predicting sales growth of only 4% to 8%. This is below what investors hoped for, but it’s important to note that Amazon typically meets or beats its predictions. They could face challenges from foreign exchange rates, which affected their fourth-quarter guidance.
Amazon is heavily investing in artificial intelligence (AI), underscoring its future growth potential. The company plans to spend about $100 billion on AI initiatives by 2025. Analysts expect Amazon’s first-quarter sales to be around $155 billion, suggesting continued growth ahead.
On the other hand, Walmart is steady and reliable. They will report their fourth-quarter and full-year results soon, with expectations of $179 billion in sales for the fourth quarter. If they meet this target, they’ll still fall short compared to Amazon’s numbers for the same period.
For the entire fiscal year, Walmart is on track for $677 billion in sales, while Amazon is projected to reach about $638 billion in 2024. The gap is closing, especially as Walmart aims for $695 billion in sales for fiscal 2026, just behind Amazon’s anticipated results for 2025.
Walmart remains a solid choice for investors. Its vast retail network helps it grow steadily, and it offers reliable dividends. The company’s e-commerce sales are also on the rise, increasing by 27% year over year in the latest quarter. Its numerous physical stores give it an advantage in reaching customers, ensuring it stays a significant player in U.S. e-commerce.
Investors may not be too troubled by Walmart slipping to second place, as long as it continues to show consistent growth. For Amazon, there are still vast opportunities ahead, especially in AI, which may significantly increase its revenue from AWS, currently at about 14% of total sales.
In summary, now might be a great time to invest in Amazon for growth, while Walmart remains a strong option for stable dividends.
