Amazon has overtaken Walmart to become the world’s largest company by annual revenue, marking a historic shift in the long-running rivalry between the two retail giants. Walmart reported revenue of $713.2 billion for its most recent fiscal year, narrowly trailing Amazon’s $716.9 billion. The development had been anticipated for months after Amazon first exceeded Walmart in quarterly sales roughly a year ago, signaling a gradual but decisive change in the competitive landscape.
While the milestone is largely symbolic, it highlights how the retail sector is evolving in response to shifting consumer behavior and rapid technological change. Amazon’s rise reflects the company’s transformation from an online retailer into a diversified technology powerhouse. Although its core e-commerce business remains its largest revenue driver, the company has significantly expanded through cloud computing, advertising, and third-party seller services.
According to its latest annual filing, third-party seller services accounted for approximately 24 percent of Amazon’s total sales in 2025. Amazon Web Services contributed roughly 18 percent, underscoring the growing importance of high-margin technology businesses in the company’s overall performance. This diversified revenue mix has given Amazon an advantage that extends well beyond traditional retail.
Walmart’s loss of the top position does not reflect weakness in its business. The company’s revenue has more than doubled over the past two decades, supported by its extensive physical footprint and expanding digital operations. Walmart operates more than 4,600 stores and around 600 Sam’s Club locations in the United States, assets it has increasingly leveraged to support its online growth. Its U.S. digital business grew 27 percent in the fiscal fourth quarter and has recorded double-digit gains for 15 consecutive quarters.
The retailer has also taken visible steps to position itself more firmly as a technology-driven company. Its recent move from the New York Stock Exchange to the Nasdaq and its market valuation surpassing $1 trillion reflect broader ambitions beyond traditional brick-and-mortar retail. Fourth-quarter results showed continued momentum in higher-margin segments such as digital advertising and its third-party marketplace.
Artificial intelligence is emerging as the next major battleground between the two companies. Walmart has pursued a partnership-focused strategy, striking agreements with major AI developers and introducing its in-house shopping assistant, Sparky. The virtual tool appears within Walmart’s app to help customers discover products more easily. Company executives reported that customers who use Sparky spend about 35 percent more on average than those who do not, and roughly half of Walmart app users have interacted with the feature.
Walmart leadership has emphasized that the company intends to rely on partnerships for advanced AI capabilities rather than building large-scale foundational models internally. Executives say this approach allows Walmart to focus on applying technology directly to retail experiences while leaving core AI development to specialized technology firms. AI investments are included in the company’s capital expenditure plans, which are projected to total about 3.5 percent of annual sales.
Amazon, by contrast, is investing aggressively in building its own AI ecosystem. The company has expanded its proprietary shopping assistant, Rufus, which has been used by more than 300 million customers and is credited with generating nearly $12 billion in incremental annualized sales. Amazon continues to integrate Rufus more deeply across its platform as it seeks to replicate the in-store discovery experience through digital tools.
The company is also committing substantial resources to AI infrastructure, announcing plans to spend up to $200 billion on related initiatives this year. Much of that investment is expected to fund data centers, specialized chips, and networking equipment. The scale of the spending has prompted some investor caution, with Amazon’s shares declining for several consecutive sessions following its recent earnings report.
Despite market concerns, Amazon is continuing to expand AI capabilities across its businesses, including updates to Alexa and further investments in advanced AI development. The contrasting strategies adopted by Amazon and Walmart underscore how artificial intelligence is rapidly reshaping the future of retail. As both companies deepen their technology investments, the competition between them is entering a new phase defined less by store count or delivery speed and more by digital ecosystems and intelligent commerce.
