Amazon surpasses Walmart in annual revenue for the first time

Walmart has topped the Fortune 500 list, which ranks the biggest U.S. companies by revenue, for the last 13 years, according to the magazine’s annual rankings. Now, it looks like the No. 1 spot belongs to the brick-and-mortar’s biggest rival. Walmart nabbed the top spot on Fortune’s rankings for the 2024 fiscal year, with revenue of $681 billion. Amazon secured the second-highest ranking with $638 billion in sales, the narrowest gap ever between the two companies, Fortune said when it published the list in June.

Amazon surpassing Walmart in annual revenue sharpens an already intense rivalry between the two retail giants. Amazon surpassing Walmart in annual revenue marks a symbolic shift in the balance of power between the two companies, underscoring how a business once defined by e-commerce has evolved into a sprawling tech and services giant. The milestone reflects not only Amazon’s retail scale, but the growing weight of its cloud computing, advertising and third-party seller ecosystem — businesses that have helped fuel faster growth than its brick-and-mortar rival.

“There’s a question of where Walmart’s next level of innovation comes from,” said Sky Canaves, principal analyst at eMarketer. “Amazon has already turned itself into a tech and services company, with cloud and advertising doing so much of the heavy lifting. Walmart is still trying to prove it can make that same kind of leap.”

Amazon’s retail division remains its largest source of revenue, but the company’s growth is increasingly driven by higher-margin businesses including cloud computing, advertising and seller services. Third-party seller services — which encompass commissions as well as fulfillment, shipping, advertising and customer support fees — made up about 24% of total sales last year, while Amazon Web Services accounted for nearly 18%.

Walmart has borrowed from Amazon’s playbook in its push to keep sales climbing. For instance, the retailer runs its own third-party marketplace and offers fulfillment services, both of which have has increasingly lured Amazon sellers. Like Amazon, Walmart is also an ad-selling machine in its own right, though its ad business significantly lags Amazon’s by revenue — Amazon’s advertising revenue surpassed $68 billion last year, while Walmart’s ad unit earned $6.4 billion.

Both companies are also heavily investing in AI. In January, Walmart announced a buzzy partnership with Google to sell the retailer’s products inside the AI assistant Gemini. 

Earlier this month, Amazon said it expects capital expenditures to reach $200 billion in 2026. Those expenditures will “predominantly” be in AWS, CEO Andy Jassy said on an earnings call with analysts, as the e-commerce giant builds out infrastructure for AI. Amazon has shed more than $450 billion in market valuation since the Seattle-based retailer announced its capex plans, which far exceeded Wall Street estimates.

The grocery gap

The Covid-19 pandemic played a significant role in Amazon’s growth, pushing quarantined consumers to online shopping. Amazon experienced unprecedented sales growth during the pandemic, with annual revenue jumping 38% to $386 billion in 2020.

One area where Walmart still has Amazon beat is the grocery aisle; groceries currently account for about 60% of the Bentonville, Arkansas retailer’s sales. Despite Amazon’s dominant share of e-commerce — the company captures 40% of online spending in the U.S. — grocery has remained a difficult puzzle for the retail giant to solve. Over the past 20 years, Amazon has tested one grocery idea after another. Last month, Amazon announced it was closing its remaining Fresh and Go locations, converting some sites into Whole Foods Market stores. 

Amazon captures only a sliver of overall U.S. grocery spending, according to data from Numerator, which counts food and beverage sales but not alcohol and nonfood items. As of September, Walmart claims 21% of overall grocery spending, while Kroger captures 8.5%. Amazon and Whole Foods, on the other hand, each have 1.6% of the market. Amazon says Numerator’s data underrepresents Amazon in the grocery space because it does not include non-food CPG products, which are commonly ordered through its e-commerce site.

Amazon says it is one of the top three grocers in the U.S., with over $150 billion in gross sales. Since Amazon acquired Whole Foods Market in 2017 for $13.7 billion, the grocery store chain has seen over 40% sales growth, according to Amazon.

Amazon remains focused on growing its market share in grocery to compete with Walmart. One way Amazon is doing that is by providing faster delivery, especially for perishables. The company announced earlier this month that U.S. Prime members received over 8 billion items the same or next day in 2025, an over 30% increase compared to the prior year, with groceries and everyday essentials making up half of the total items.

Additionally, Amazon is testing a 30-minute delivery option called Amazon Now in Seattle and Philadelphia. And Amazon plans to open a second big-box store in the Chicago area after it unveiled plans last month for another Walmart-style supercenter in a nearby suburb, according to the Chicago Tribune.

“In recent months, Amazon has not only expanded its fulfillment and delivery initiatives, but is now accelerating the pace of its physical store footprint with plans to open 100+ Whole Foods locations over the next few years,” Wedbush analysts wrote in a Jan. 27 research note. “The company is further exploring a new physical retail supercenter, mirroring the likes of Walmart by offering Amazon’s broad selection across grocery, essentials, and general merchandise.”