Walmart (left) and Amazon signs.
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first time, Amazon deprived of the throne walmart As the company with the largest annual revenue.
Walmart on Thursday reported annual sales of $713.2 billion for its most recent fiscal year, falling short of Amazon’s $716.9 billion in sales. The milestone had been in the works for months, as Amazon overtook Walmart in quarterly sales for the first time about a year ago.
The shuffle is largely symbolic, but it underscores the battle both retailers have waged to define and respond to ever-changing consumer tastes. The companies are beginning a new chapter in their competition as artificial intelligence reshapes the way companies operate, make profits and drive sales.
Amazon rose to the top of the revenue mountain by operating a vast online web store and doing more than promising fast delivery. While the company’s core retail division is its biggest source of revenue, its huge cloud computing, advertising and merchant services businesses also drive sales. Third-party seller services, which include fees and shipping fees collected by Amazon’s fulfillment, shipping, advertising, and customer support, accounted for about 24% of the company’s total sales in 2025, according to its most recent annual report. Amazon Web Services accounted for about 18%.
Wal-Mart’s revenue has more than doubled in 20 years, so it wasn’t Wal-Mart’s weakness that cost it the top spot. The company leverages more than 4,600 Walmart stores and approximately 600 Sam’s Club stores in the U.S. to drive its digital business, which grew 27% in the U.S. in its fiscal fourth quarter, marking its 15th consecutive quarter of double-digit growth.
The expansion comes as Walmart seeks to position itself as a technology company rather than just a retailer, citing Amazon’s strategy.
There are multiple signs of that ambition. Walmart relisted its stock, moving from the New York Stock Exchange to the tech-heavy Nasdaq in early December. Its market value passed the $1 trillion mark earlier this month, a valuation achieved almost exclusively by tech companies including Amazon, after rising more than 21% last year.
And the big retailer’s fourth-quarter profit, boosted by digital advertising and third-party marketplaces, shows Walmart’s focus on pursuing high-margin businesses and thinking beyond brick-and-mortar retail.
Amazon and Walmart’s AI ambitions
In many ways, Walmart’s recent efforts to grow its third-party market were an answer to Amazon’s dominance of the platform. While Walmart is trying to catch up with Amazon in some areas, it is also trying to gain an advantage in new areas.
Over the past few years, Amazon and Walmart have used various AI strategies to make their businesses more efficient and their products more appealing to shoppers.
Walmart signed deals with OpenAI’s ChatGPT in October and Google’s Gemini in January to make its products easier to discover and buy. It is also equipped with “Sparky,” a shopping assistant that utilizes a unique AI. A virtual assistant that looks like a smiley face can pop up in Walmart’s app and help shoppers find products.
Walmart, like many other companies, is in the early stages of implementing AI, and it’s unclear how this technology will impact its business over the long term.
Walmart CEO John Furner said on an earnings call Thursday that when customers use Sparky, they spend more. He said the average order value for customers who use Sparky is about 35% higher than shoppers who don’t use the tool.
Walmart US CEO David Guggina said during an earnings call that about half of Walmart’s app users use Sparky.
“Agent AI is increasingly embedded throughout Walmart,” Guggina said. “This has strengthened our operations, increased employee productivity and improved the customer experience.”
Walmart Chief Financial Officer John David Rainey said the retailer’s full-year capital spending plan includes AI investments, which are expected to amount to about 3.5% of sales. These costs also include the company’s investments in automation and store renovations.
There are limits to Walmart’s technology ambitions. Regarding AI, Rainey said Walmart will rely on the expertise of technology companies rather than trying to make its own products.
“As you can see from our previous announcements, we are committed to developing AI through partnerships,” he said at the company’s earnings conference. “It enables technology companies to do what they do best and develop innovative technology. It also enables us to do what we do best, with a clear commitment to translating the best technology into retail experiences that create value for our customers, members and our companies.”
Like Walmart, Amazon faces new pressure to respond to the rise of agency commerce. Chatbot makers like OpenAI; google and Perplexity have introduced automated commerce features aimed at changing the way people shop online.
There are other companies like Walmart. Etsy and Shopify Despite announcing a shopping partnership with an AI platform, Amazon remains on the sidelines. The company blocked agents from accessing the site and ramped up its use of its own shopping chatbot, Rufus, which uses its own model and Anthropic’s chatbot Claude.
The company says Rufus is used by more than 300 million customers and increased annual revenue by nearly $12 billion last year. After slowly rolling out the service in beta two years ago, Amazon has introduced Rufus to more areas of its apps and website to encourage shoppers to use the tool.
Amazon CEO Andy Jassy said last month that Rufus and other AI tools can help shoppers search for products just like brick-and-mortar employees can.
“I think agents will help customers make those discoveries,” Jassy said. “That’s part of the reason why we’ve invested so much in Rufus, our shopping assistant.”
Amazon, on the other hand, is investing billions in AI infrastructure. Earlier this month, the company announced it would spend up to $200 billion on AI efforts this year, more than any other hyperscaler, with combined spending expected to reach nearly $700 billion in 2026. Most of Amazon’s spending is expected to go to data centers, chips and networking equipment.
Wall Street has been skeptical of Amazon’s capital spending plans, and the company’s stock fell for nine consecutive days following its Feb. 5 earnings report, shaving more than $450 billion off its market capitalization.
Amazon’s investments aren’t limited to AI computing. The company has also committed significant resources and talent to developing AI tools across its businesses. We also rolled out a series of AI models to improve the Alexa assistant. It has also invested $8 billion in Anthropic since 2023.
— CNBC’s Robert Hum contributed to this report
