There is a possibility that one of America’s largest retailers, Walmart, is being replaced. This is a major blow because the warehouse has been the biggest for many years and it has always been difficult for other retailers to compete against it. However, it looks like the retailer is being replaced after many years – a significant growth stock just took that title away. This is extremely shocking news to everyone because the retailer has always been on top on every area possible.
Walmart: Replaced as largest Retailer
This larger retailer has been replaced by another popular name, and it is currently the new name at the top of the retail industry. In the fourth quarter of last year, 2024, Amazon (NASDAQ: AMZN) managed to reach a net sale of $188 billion. Whereas Walmart (NYSE: WMT) made a revenue of $181 billion. Thus, marking the first time the retailer ever came in below Amazon.
However, Walmart still managed to take the top spot for the year. The company’s revenue improved by 5% year over year to $681 billion. This amount severely surpassed Amazon’s full-year net sales of $638 billion. Yet, it looks like Amazon will soon pass Walmart on the full-year basis during this year. This is especially the case since Amazon is growing at an insane pace – twice as fast as Walmart’s growth.
The Reason behind Amazon’s growth
Currently, there are several reasons why Amazon is growing at such a fast pace. Here is what Amazon has done to win Walmart’s crown and also what it will keep on doing in the coming years to remain on top of the world in the retail industry.
Firstly, the sales that are indicated o Amazon’s website is the largest part of the company. However, the company’s biggest growth is not occurring at the sales department, but elsewhere in the business. The company sells different things and makes money of aspects like commissions and fulfilment fees. In quarter four, these aspects made a $47 billion revenue stream, improving with a 9% year over year and helping it to move ahead of Walmart.
Secondly, the retailer’s advertising department is one of the fastest growing areas. Amazon’s advertising business is one of its fastest areas of growth. In quarter 4 the advertising revenue was at $17 billion, which is still relatively small, however it increased with 18% and has plenty of more room to grow. Launching the retailer’s advertising business and ramping it up in recent years has been an excellent catalyst for growth. This is due to the fact that Amazon leverages the digital platform that was already built.
Thirdly, the Amazon Web Services (AWS) cloud-computing business continuously deliver outsized financial outcomes. After it only grew by 13% in the fourth quarter of 2023, AWS delivered a total of 19% growth in the most recent quarter. This is an impressive growth rate, considering that AWS made more than $100 billion in revenue in last year, 2024.
Therefore, these are the reasons why Amazon’s business segments are booming. This business is not bigger that Walmart’s business and the key reason for this is the retailer’s stock performed extremely good. There is also an indication of ongoing growth points that will be good for the future returns when it comes to shareholders.
What is next for Walmart?
Although Walmart might not officially be the largest name in retail anymore, many investors should not overlook the retailer now that is operating in Amazon’s shadow. Just like Amazon, Walmart is commendably focused on growing the retailer’s digital-advertising business, with a revenue increase of 27% to $4.4 billion in 2024. The retailer’s recent acquisition of smart-TV company Vizio is only one way that the retailer can continue to grow advertising revenue in coming years.