Amazon vs. Walmart: This Isn't Even Close

Key Points

Amazon has a higher long-term revenue compound annual growth rate than Walmart.

The tech conglomerate is tapping into multiple high-growth industries like cloud computing, online advertising, and AI chips, while Walmart's growth opportunities are more limited.

Amazon boasts a lower P/E ratio than Walmart, offering a higher margin of safety.

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Amazon (NASDAQ: AMZN) and Walmart (NASDAQ: WMT) are the two largest retailers in the world, and their stocks have delivered exceptional returns for long-term investors. Both stocks have outperformed the S&P 500 year to date, but picking a winner between these two stocks is surprisingly easy.

While Amazon is the leading online retailer, Walmart's vast network of physical locations makes it the top brick-and-mortar retailer. Here's what investors should know when comparing these two stocks.

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Amazon boasts higher revenue growth and exposure to more opportunities

Amazon wins when it comes to revenue growth, with a 12.7% compound annual growth rate (CAGR) over the past three years. Walmart only has a 5.1% CAGR over the same stretch. Amazon also leads in 5-year, 10-year, 15-year, and 20-year revenue CAGRs. Both companies have also seen their revenue growth rates accelerate over the past five years.

These revenue growth trends show that Amazon has been gaining market share at a faster rate, and this trend continued in the most recent quarter.

Amazon's Q4 results notched 14% year-over-year revenue growth, with more than 20% growth in its cloud computing (AWS) and online advertising segments. Amazon's custom AI chips also produce more than $10 billion in annual revenue at this point. Total company sales were $213.4 billion in the fourth quarter,

Meanwhile, Walmart delivered 5.6% year-over-year revenue growth in Q4 of its fiscal 2026, which ended on Jan. 31. High growth rates from e-commerce and online advertising do not override the fact that almost all of Walmart's revenue comes from its physical locations. Amazon has done a much better job of diversifying over the years, and it shows in its financial results.

The Amazon argument gets stronger when looking at valuation and profits

Amazon's higher revenue growth also comes with better profit margins than Walmart. While the physical retailer has done an excellent job of improving margins with online ads and e-commerce, its margins are still lower than Amazon's.

To top it all off, Amazon has a more attractive valuation than Walmart. The e-commerce leader has a 34.7 price-to-earings (P/E) ratio compared to Walmart's 45.3 P/E. Amazon's lower valuation comes with faster revenue and net income growth, plus more long-term catalysts.

Walmart may be more suitable for retirees with less time available to spend in the market and a bigger need for non-salary income, since it is less volatile than the S&P 500 and pays a dividend, but a yield below 1% isn't a game changer. Walmart has outperformed Amazon stock over the past five years by a wide margin, but a reversal seems in order. Amazon is the winner in this match-up.

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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.