Amazon vs. Walmart: The Battle for Hybrid Retail
Amazon, founded in 1994, is a multinational technology giant with a diverse portfolio of businesses, including e-commerce, cloud computing and artificial intelligence. The company has revolutionised the way we live and shop.
On the other hand, since opening its first Wal-mart Discount City store in 1962, Walmart now operates a chain of hypermarkets, discount department stores and grocery stores in the US and 23 other countries.
Let's compare these multinational giants to see how they stack up.
We also look at which stock gives you more value for your dollar.
Amazon, the undisputed leader in e-commerce, has been gradually carving its way into the physical retail landscape. From experimenting with cashier-less Amazon Go stores to opening a beauty and personal care 'parapharmacy' in Italy, Amazon is proving it can adapt to brick-and-mortar retail. A standout contributor to Amazon's success is Amazon Web Services (AWS), which generates 17% of the company's total 2024 sales.
On the flip side, Walmart — a giant in physical retail — has made significant strides in its e-commerce operations, ensuring its digital storefront competes effectively with Amazon.
While Walmart's online presence may not match Amazon in scale, it has expertly leveraged its vast network of physical stores for online order fulfillment.
Amazon's 2024 revenue increased 11% year on year to US$638 billion with North America segment sales increasing nearly 10% year on year to US$387 billion.
The bulk of its revenue comes from e-commerce sales from Amazon.com and other Amazon retailing platforms.
For its fiscal year ending 31 Jan 2025, Walmart reported a revenue of US$681 billion, a 5.1% year-on-year increase.
For the fourth quarter of fiscal 2025, the retailer's US e-commerce sales soared 20% year on year.
Walmart relies on consistent revenue streams from its well-established physical store network and grocery leadership, which contributes over half of its total revenue.
While it continues to scale its online operations, it has demonstrated the potential to match the scale and growth dynamics seen in Amazon's digital ecosystem.
Walmart's ability to leverage its hybrid retail model remains a key strength, but Amazon's relentless pursuit of innovation and wider global digital reach indicates it is catching up fast.
Both companies present compelling narratives, but Amazon's growth trajectory in e-commerce and cloud services contrasts sharply with Walmart's steady, essentials-driven approach. Investors must weigh innovation and potential versus reliability when considering these retail giants.
Walmart has a strong presence in emerging markets like India and Mexico, where its scalable physical retail model shines. On the other hand, Amazon is focusing on urban centres with innovative store concepts, like its Milan beauty outlet, as well as leveraging its Whole Foods acquisition to strengthen its physical footprint.
Amazon's foray into healthcare and fintech highlights its ambition to dominate industries beyond retail. AWS continues to outperform, and ventures into health insurance and drug delivery show serious promise. Similarly, Walmart has expanded via health clinics and financial services, solidifying its position as a grocery leader and innovating to stay at the forefront of customer needs.
Competitive Strengths
Amazon
Walmart
Prime Ecosystem
Drives customer loyalty with over 200 million global subscribers.
Not Applicable.
AWS Synergies
AWS generates substantial profits and funds innovation.
Not Applicable.
Tech Advantage
Cutting-edge technology like AI logistics and cashier-less stores.
Focuses on integrating digital tools within physical retail.
Store Network
Expanding physical presence, but still developing store strategies.
10,500+ global stores enabling efficient distribution and pickup.
Grocery Dominance
Limited grocery market share compared to Walmart.
Controls nearly 25% of US grocery sales, ensuring steady cash flow.
Brand Value
Known for innovation and global market reach.
Trusted, resilient brand with a strong international presence.
Amazon's global reach, AWS' profitability, and its seamless integration of online and offline retail channels position it as a strong growth stock.
Walmart boasts industry dominance in groceries, providing a dependable anchor during economic volatility.
Amazon faces the challenge of managing high operating expenses, which could compress margins during periods of slow e-commerce growth.
Meanwhile, Walmart must juggle digitalising its retail offerings while competing in lower-margin categories like groceries.
When evaluating valuation metrics, the price-to-earnings (P/E) ratio offers a clear picture of how much investors are willing to pay for every dollar of earnings.
Amazon's P/E ratio stood at 35.8 times as of 17 March 2025 and Walmart's was 35.4 times.
Both companies have roughly the same P/E ratios, which highlights how both companies, despite having different business models, command robust valuations.
These valuations also reflect Amazon's innovation-driven strategies and Walmart's stability and hybrid retail expertise.
Return on Equity can be used as an indicator of a company's profitability and ability to generate returns on a shareholder's equity.
Amazon's ROE came in at 20.7% for 2024 and Walmart's 21.4% ROE for the fiscal year ending 31 Jan 2025 are both strong indicators of the company's effective utilisation of its equity to drive growth and profitability.
Amazon's FCF for 2024 was US$32.2 billion and Walmart's was US$12.7 billion.
Amazon's growth extends beyond retail, with its cloud service AWS driving profits while healthcare and financial services ventures create additional revenue opportunities.
Walmart leverages its vast store network while expanding digitally, maintaining its strength in everyday essentials and pursuing steady growth through healthcare services and emerging markets.
The choice between these stocks reflects different investment strategies.
Amazon targets aggressive growth through tech innovation and industry disruption
Walmart delivers consistent returns through stable retail operations and dividends
Growth-focused investors may prefer Amazon's potential for higher returns across multiple sectors. Conservative investors might choose Walmart for its steady performance and reliable dividend payments, particularly during economic downturns.
Attention Growth Investors: Our latest report, 'The Rise of Titans,' gives you a front-row seat on the 7 most influential US stocks today. If you're passionate about tech and growth, you can't go wrong with our research. Downloading this FREE report could be the most strategic move you make this year. Click here to get started now.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Joanna Sng of The Smart Investor owns shares of Amazon.
The post Amazon vs. Walmart: The Battle for Hybrid Retail appeared first on The Smart Investor.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Allient Inc. (NASDAQ:ALNT) Is Going Strong But Fundamentals Appear To Be Mixed : Is There A Clear Direction For The Stock?
Allient's (NASDAQ:ALNT) stock is up by a considerable 82% over the past three months. However, we wonder if the company's inconsistent financials would have any adverse impact on the current share price momentum. Particularly, we will be paying attention to Allient's ROE today. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Allient is: 3.6% = US$9.8m ÷ US$273m (Based on the trailing twelve months to March 2025). The 'return' is the income the business earned over the last year. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.04 in profit. See our latest analysis for Allient We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. It is hard to argue that Allient's ROE is much good in and of itself. Even compared to the average industry ROE of 11%, the company's ROE is quite dismal. As a result, Allient's flat earnings over the past five years doesn't come as a surprise given its lower ROE. We then compared Allient's net income growth with the industry and found that the average industry growth rate was 13% in the same 5-year period. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. If you're wondering about Allient's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Allient's low three-year median payout ratio of 9.9%, (meaning the company retains90% of profits) should mean that the company is retaining most of its earnings and consequently, should see higher growth than it has reported. Moreover, Allient has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth. In total, we're a bit ambivalent about Allient's performance. Even though it appears to be retaining most of its profits, given the low ROE, investors may not be benefitting from all that reinvestment after all. The low earnings growth suggests our theory correct. Having said that, looking at current analyst estimates, we found that the company's earnings growth rate is expected to see a huge improvement. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Gizmodo
12 minutes ago
- Gizmodo
Samsung 990 EVO Plus SSD Stocks Fly Off by the Pallet, Amazon Cuts Prices Lower Than Prime Day
Amazon is stretching the Prime Day action over the weekend and everyone has an opportunity to snap up some of the year's best deals. It's not too late, and you don't even need to be a Prime member to get in on the bargain. Among the top offers still available is the Samsung 990 EVO Plus SSD which is currently discounted across all capacities – 1TB, 2TB, and even 4TB. Right now, you can even obtain the 2TB Samsung 990 EVO Plus SSD for just $129, a reduction from the usual price of $176. That is a 27% drop on one of the fastest and most dependable SSDs out there. With an offer like that, no wonder that the 990 EVO Plus is selling hotcakes and wearing the 'Amazon's Choice' badge. See at Amazon The Samsung 990 EVO Plus SSD is an excellent choice if you're looking for faster boot times, quicker file transfers, and smoother overall performance. With support for PCIe Gen 4×4 and Gen 5×2, this drive is both the new board compatible as well as future-proof upgradable. With a read speed of up to 7,250 MB/s sequential, it offers incredibly fast data access, which is ideal for gamers and professionals who demand top-end performance. The 990 EVO Plus boasts one of the most distinctive features of using HMB (Host Memory Buffer) technology and Intelligent Turbowrite 2.0. These innovations help the SSD maintain high speeds even during heavy workloads so that your system stays responsive whether you're working with large files. The drive's M.2 2280 form factor makes it easy to install in most modern laptops and desktops and it's compatible with both PCIe Gen 4 and Gen 5 systems. The 990 EVO Plus boasts high-quality materials and superior thermal management to prevent overheating so you can count on consistent performance in the long term. The rugged reputation of Samsung and data integrity mean your important files are secure and you won't have to endure drive failure to ruin your task continuity. Don't miss your chance to grab this deal before it's gone and give your PC or laptop the performance boost it deserves. See at Amazon
Yahoo
18 minutes ago
- Yahoo
Jim Cramer Reiterates $200 PT for Palantir
Palantir Technologies Inc. (NASDAQ:) is one of the stocks that Jim Cramer shed light on. During the episode, Cramer reiterated his $200 price target for the company stock, as he said: 'If the market could mount such a comeback after a very difficult moment, which was Liberation Day, and against all these institutions, then why not keep buying? It's working. Okay, so now you can quibble over what these people are buying. There's a lot of money going into the high-flying stocks, stocks like Palantir, and I told you, $50 goes to $100, $100 goes to $200.' A software engineer manipulating a vast network of code on virtual monitors. Palantir (NASDAQ:PLTR) creates software platforms that uncover patterns in complex data, support operational decisions. The company integrates AI tools to improve intelligence analysis and organizational workflows. Cramer mentioned the stock during the July 1 episode and said: 'The biggest winner of the first half was, of course, Palantir Technologies, the government enterprise software company with the stock that's beloved by individual investors. It finished the first six months of the year up more than 80%. The skeptics will point to Palantir's nosebleed valuation, I mean, this is now a $308 billion company, trades at a mere 225 times this year's earnings estimates, or the fact that very few people can articulate what their software really does. But that's par for the course with enterprise software stories, and Palantir's got tremendous growth with surprisingly high margins. Just as important, the people who run the company are simpatico with the Trump administration, especially the Defense Department. Good way to win business. They want to change the Defense Department in a way that I think you and I might want, but they'll just say it in a potty-mouth way. Palantir's now a $130 stock, and I've said for a while now that it's headed to $200, not because of the fundamentals, but because that's how momentum stocks behave. Just remember, if you've got huge gains in this one, those gains don't count until you're reading the register on part of the position. Take something off the table, let the rest run, play with the house's money.' While we acknowledge the potential of PLTR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
