A tale of two retailers

Walmart just scanned in a win.

The retail giant topped fourth-quarter earnings and revenue estimates in its first report under CEO John Furner (who only took the helm on February 1). The big headline: US e-commerce sales climbed 27% year over year, bolstered by online orders and in-store pickups, and now account for 23% of revenue—a record high.

The tone, however, turned more cautious when it came to forward guidance. Walmart's outlook for the new fiscal year came in below expectations, with management pointing to continued uncertainty in consumer demand. That said, the company usually starts the year conservatively and raises its forecast as conditions become clearer, so for now, investors are giving it the benefit of the doubt—shares fell just 1.38% today.

Amazon vs Walmart

For more than a decade, Walmart held the title of the world’s largest company by revenue, and earlier this month became the first traditional retailer to surpass a $1 trillion market value. But that revenue crown has now shifted to a new head: Amazon reported $717 billion in 2025 sales, narrowly surpassing Walmart’s $713.2 billion for the fiscal year ended January 31.

The two companies compete for consumers’ dollars in different ways: Amazon leads online retail, drawing roughly 2.7 billion visits per month across its digital platforms, while Walmart remains the largest brick-and-mortar retailer globally, operating more than 10,000 stores and clubs worldwide.

The major differentiator has been cloud computing. Amazon’s revenue has grown at nearly ten times Walmart’s pace over the past decade, helped significantly by Amazon Web Services. Strip out AWS, and Amazon’s 2025 revenue would total about $588 billion, according to Bloomberg.

Walmart, lacking a comparable technological growth engine, remains more tied to traditional retail economics. However, investors are laser-focused on how Furner navigates an economy increasingly dominated by AI, and how the new CEO integrates the tech into Walmart’s e-commerce segment and its burgeoning advertising business.

What does this mean for the economy?

Given its scale and customer reach, Walmart is often viewed as a bellwether for consumer demand and broader economic trends, making its commentary especially telling.

What it suggests is an economy that’s holding up, but unevenly: higher-income shoppers continue to spend freely, while lower-income households remain constrained, a classic K-shaped pattern. The good news: while prices have risen about 1% over the past few months, management indicated that tariff-related cost pressures are likely nearing their peak.

For now, the carts keep moving, as Walmart navigates what comes next.—SY