Signs for Walmart (L) and Amazon.
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For the first time, Amazon dethroned Walmart as the company with the highest annual turnover.
Walmart on Thursday reported annual revenue of $713.2 billion for its most recent fiscal year, less than Amazon’s $716.9 billion. This milestone has been months in the making, as Amazon surpassed Walmart in quarterly sales for the first time about a year ago.
The shakeup, while largely symbolic, underscores the battle both retailers have waged to define and keep up with consumers’ ever-changing preferences. They are opening a new chapter in this rivalry as artificial intelligence reshapes the way businesses operate, make money and drive sales.
Amazon has risen to the top of the revenue list by doing much more than running a massive online store and promising fast delivery. Although its core retail unit is its largest source of revenue, its massive cloud computing, advertising and seller services businesses also fuel its sales. Third-party seller services, which include commissions and fees earned by Amazon, as well as shipping, advertising and customer support, accounted for about 24% of the company’s total sales in 2025, according to its latest annual filing. Amazon Web Services was responsible for about 18%.
It is not Walmart’s weakness that caused it to lose its first place, since its turnover has more than doubled in 20 years. The retailer relied on more than 4,600 Walmart stores and about 600 Sam’s Club stores in the U.S. to power its digital business, which grew 27% in the U.S. in the fiscal fourth quarter and has posted double-digit percentage gains for 15 consecutive quarters.
This expansion came as Walmart took a cue from Amazon’s playbook and attempted to position itself as a technology company as well as a retailer.
The signs of its ambitions are numerous: Walmart re-listed its shares on the stock market, moving from the New York Stock Exchange to the technology-heavy Nasdaq at the beginning of December. Its market value surpassed the $1 trillion mark earlier this month, a valuation achieved almost exclusively by technology companies, including Amazon, after rising more than 21% last year.
And the big-box retailer’s fourth-quarter profits, which were boosted by digital advertising and its third-party marketplace, illustrated Walmart’s focus on pursuing higher-margin businesses and thinking beyond brick-and-mortar retail.
The ambitions of Amazon and Walmart in terms of AI
In many ways, Walmart’s recent push to expand its third-party marketplace was a response to the dominance of Amazon’s platform. Even as it tries to catch up with Amazon in some areas, Walmart is trying to gain an advantage in a new frontier.
Over the past few years, Amazon and Walmart have used different AI strategies to try to make their businesses more efficient and make their products more attractive to shoppers.
Walmart struck a deal with OpenAI’s ChatGPT in October and Google’s Gemini in January to make its products easier to discover and purchase. It also has its own AI-powered sales assistant, Sparky. The virtual assistant, which looks like a smiley face, appears on the Walmart app and can help shoppers find items.
Walmart, like many other companies, is in the early days of AI adoption, and it’s unclear how the technology will affect its business in the long term.
During the company’s earnings conference call Thursday, Walmart CEO John Furner said customers spend more when using Sparky. He said customers who use Sparky have an average order value about 35% higher than shoppers who don’t use the tool.
About half of Walmart’s app users used Sparky, Walmart U.S. CEO David Guggina said during the earnings conference call.
“Agentic AI is becoming more and more integrated within Walmart,” Guggina said. “It strengthens our operations. It improves associate productivity and the customer experience.”
Walmart Chief Financial Officer John David Rainey said AI investments are included in the retailer’s full-year capital spending plans, which are expected to represent about 3.5% of sales. These expenses also include the company’s investments in automation and store renovations.
There are limits to Walmart’s technological ambitions. When it comes to AI, Rainey said Walmart will rely on the expertise of tech companies rather than trying to create its own products.
“As you’ve seen in the announcements we’ve made, we’re approaching AI development through partnerships,” he said during the company’s earnings conference call. “It allows technology companies to do what they do best, develop innovative technology, and it gives us the clarity to do what we do best, to translate the best of technology into retail experiences that create value for our customers, our members and our business.”
Like Walmart, Amazon is also facing new pressures to respond to the rise of agent commerce. Chatbot creators like OpenAI, Google and Perplexity have introduced automated commerce features that aim to change the way people shop online.
While other companies like Walmart, Etsy And Shopify announced business partnerships with AI platforms, Amazon stayed away. It blocked agents from accessing its site and dubbed its own shopping chatbot, Rufus, which is powered by its own models and Anthropic’s Claude chatbot.
The company said Rufus has been used by more than 300 million customers and generated nearly $12 billion in incremental annualized sales last year. After slowly rolling out the service in beta two years ago, Amazon injected Rufus into more areas of its app and website to encourage shoppers to use the tool.
Amazon CEO Andy Jassy said last month that Rufus and other AI tools could help shoppers find products, much like an employee in a physical store.
“I think agents are going to help clients with this type of discovery,” Jassy said. “And that’s part of why we invested so much in Rufus, who is our sales assistant.”
Meanwhile, Amazon is investing heavily in AI infrastructure. Earlier this month, it announced it would spend up to $200 billion this year on AI initiatives, more than all other hyperscalers, which together planned nearly $700 billion in spending in 2026. Most of Amazon’s spending is expected to be on data centers, chips and networking equipment.
Wall Street viewed Amazon’s investment plans with skepticism, sending the company’s shares down for nine straight days after its Feb. 5 earnings release and reducing its market value by more than $450 billion.
Amazon’s investments are not limited to AI computing. The company has also dedicated significant resources and talent to developing AI tools across its businesses. He also has has rolled out a suite of AI models and revamped its Alexa assistant. It has also invested $8 billion in Anthropic since 2023.
—Robert Hum of CNBC contributed to this report