Amazon has officially outpaced Walmart, marking a significant milestone as it reported fourth-quarter revenue of $187.8 billion, surpassing Walmart’s anticipated revenue of $180 billion. This shift, which reflects Amazon's serious growth and diversification from its retail roots, highlights how the online giant has sustained its upward momentum over the years.
On July 24, 2015, Amazon's market capitalization first surpassed Walmart's, but it has taken nearly ten years for its revenue to follow suit. Back then, Amazon's revenue was just one-fifth of Walmart’s, with figures around $23.2 billion during the second quarter of 2015.
Today, Amazon has exponentially broadened its business model beyond mere online retailing. The company has expanded aggressively, investing heavily in cloud services and streaming video, and more recently, artificial intelligence. It posted earnings of $1.86 per share for this latest quarter, beating analysts' expectations, and even though stock dipped by about 4% post-announcement due to cautious revenue predictions for the current quarter, its growth narrative remains compelling.
According to earningswhispers.com, analysts predicted Amazon’s revenue to range between $151 billion and $155.5 billion for the first quarter of 2025, which fell short of the consensus estimate of $158.86 billion. Amazon cited significant foreign exchange impacts as one reason for this lowered forecast.
Yet, Amazon's brick-and-mortar results brought some good news. The company saw net sales of $5.58 billion at physical locations, experiencing year-over-year growth of 8%, which includes Amazon Fresh grocery locations. This is part of Amazon's broader strategy to meld its online retail capacities with physical presence.
During the earnings call, CEO Andy Jassy also shared impressive figures about the popularity of its Prime Big Deal days and sales surrounding Black Friday and Cyber Monday, emphasizing strong growth across its Prime membership program. Notably, Amazon “delivered over 65% more items to U.S. Prime members the same day or overnight than in Q4 2023,” showcasing its commitment to swift delivery.
Proposed plans of nearly $100 billion investment in AI by 2025 are set to transform the retailer's operational dynamics, as Jassy articulated the ambitions for enhancing delivery speed and efficiency through technological advancements, including robotics and automation. "You'll also see us expand the number of delivery stations we have in rural areas," he indicated during the call, accentuating Amazon's focus on improving its cost-to-serve metrics.
When comparing the financial rewards achieved since the market cap milestones, investments made on the day of Amazon's market cap crossover have yielded returns of 802% for stockholders, compared to Walmart's 331%, and the S&P 500’s gain of 193%. This data underlines the massive investor appetite for Amazon's growth story.
Speaking of innovation, the introduction of the AI-powered chatbot Rufus has begun to merge Amazon's retail and technology sectors. Jassy noted, "We have so many customers now who just use Rufus to help them find quick facts about products... The personalization keeps getting much more efficient as we advance this technology to assist our users effectively." This tool promises to innovate how customers shop online, offering product summaries and tailoring the shopping experience.
Amazon also has been making strides by enhancing services like its pharmacy delivery business. By 2025, it plans to open 20 new brick-and-mortar pharmacy locations, catering to demand for immediate access to medications and health necessities, paving the way for greater consumer engagement with the brand.
Overall, Amazon's latest financial report elucidates not just its dominance over Walmart, transforming the competitive retail environment, but also foreshadows future growth driven by technologies and innovations. There’s no doubt the company has reinvigorated consumer expectations and redefined what it means to be the leader in retail.