Amazon surpasses Walmart in annual revenue for first time, as both chase AI-fueled growth

For the first time, Amazon has dethroned Walmart as the corporate with the biggest annual revenue.

Walmart on Thursday reported annual revenue of $713.2 billion for its most up-to-date fiscal yr, shy of Amazon’s $716.9 billion in revenue. The milestone was brewing for months, as Amazon leapfrogged Walmart in quarterly gross sales for the first time a couple of yr in the past.

The shuffle, whereas largely symbolic, underscores the battle the 2 retailers have waged both to outline and sustain with ever-changing client preferences. They’re kicking off a brand new chapter of that rivalry as synthetic intelligence reshapes how corporations function, generate profits and drive gross sales.

Amazon rose to the highest of the revenue pile by doing way more than operating a sprawling on-line internet retailer and promising speedy supply. Whereas its core retail unit is its largest revenue generator, its big cloud computing, promoting and vendor providers companies additionally gasoline its gross sales. Third-party vendor providers, which embrace commissions and costs collected by Amazon success together with delivery, promoting and buyer help, accounted for about 24% of the corporate’s whole gross sales in 2025, based on its newest annual submitting. Amazon Internet Companies was accountable for roughly 18%.

It wasn’t Walmart’s weak point that led it to lose its high spot, as its revenue has greater than doubled in 20 years. The retailer has leaned on its greater than 4,600 Walmart shops and roughly 600 Sam’s Membership areas in the U.S. to energy its digital enterprise, which grew by 27% in the U.S. in the fiscal fourth quarter and has posted double-digit share beneficial properties for 15 straight quarters.

That enlargement got here as Walmart riffed off the Amazon playbook and tried to place itself as a tech firm as properly as a retailer.

There have been a number of indicators of its ambitions: Walmart relisted its inventory, transferring from the New York Inventory Alternate to the tech-heavy Nasdaq in early December. Its market worth surpassed the $1 trillion mark earlier this month, a valuation achieved nearly completely by tech corporations, together with Amazon, after a greater than 21% rise in the final yr.

And the big-box retailer’s fourth-quarter earnings, which have been boosted by digital promoting and its third-party market, illustrated Walmart’s emphasis on chasing higher-margin companies and pondering past brick-and-mortar retail.

In some ways, Walmart’s latest push to develop its third-party market was a solution to the dominance of Amazon’s platform. Even as it tries to meet up with Amazon in some areas, Walmart is making an attempt to achieve an edge in a brand new frontier.

Over the previous few years, Amazon and Walmart have used completely different AI methods to attempt to make their companies extra environment friendly and make their merchandise extra interesting to customers.

Walmart struck a take care of OpenAI’s ChatGPT in October and Google’s Gemini in January to make its merchandise simpler to find and purchase. It additionally has its personal AI-powered purchasing assistant, Sparky. The digital assistant, which seems like a smiley face, pops up on Walmart’s app and may help customers discover gadgets.

Walmart, like many different corporations, is in the early days of AI adoption, and it is unclear how the know-how will have an effect on its enterprise long-term.

On the corporate’s earnings name on Thursday, Walmart CEO John Furner mentioned clients are spending extra after they use Sparky. He mentioned clients who use Sparky have a median order worth that is about 35% greater than customers who do not use the device.

About half of Walmart’s app customers have used Sparky, Walmart U.S. CEO David Guggina mentioned on the earnings name.

“Agentic AI is more and more embedded throughout Walmart,” Guggina mentioned. “It is strengthening our operations. It is enhancing affiliate productiveness, and it is enhancing the client expertise.”

Walmart Chief Monetary Officer John David Rainey mentioned AI investments are included in the retailer’s capital expenditure plans for the total yr, that are anticipated to be roughly 3.5% of gross sales. These bills additionally embrace the corporate’s investments in automation and retailer remodels.

There are limits to Walmart’s tech ambitions. With regards to AI, Rainey mentioned Walmart will lean on the experience of tech corporations fairly than attempt to create its personal merchandise.

“As you have seen from the bulletins we have made, we’re approaching AI growth by way of partnerships,” he mentioned on the corporate’s earnings name. “This lets tech corporations do what they do finest, develop modern know-how, and it gives us readability to do what we do finest, to translate one of the best of tech to retail experiences that create worth for our clients and members and our enterprise.”

Like Walmart, Amazon can be dealing with new stress to reply to the rise of agentic commerce. Chatbot makers like OpenAI, Google and Perplexity have launched automated commerce options that goal to vary how folks store on-line.

Whereas different corporations like Walmart, Etsy and Shopify have introduced purchasing partnerships with AI platforms, Amazon has remained on the sidelines. It is blocked brokers from accessing its web site and has doubled down by itself purchasing chatbot, Rufus, which is powered by its personal fashions and Anthropic’s chatbot Claude.

The corporate mentioned Rufus has been utilized by greater than 300 million clients and drove nearly $12 billion in incremental annualized gross sales final yr. After slowly rolling out the service in beta two years in the past, Amazon has injected Rufus throughout extra areas of its app and web site to encourage customers to make use of the device.

Amazon CEO Andy Jassy mentioned final month that Rufus and different AI instruments might help customers with discovering merchandise very similar to an worker in a bodily retailer.

“I feel brokers are going to assist clients with that sort of discovery,” Jassy mentioned. “And it is a part of why we have invested a lot in Rufus, which is our purchasing assistant.”

In the meantime, Amazon is throwing piles of money at AI infrastructure. Earlier this month, it introduced it will spend as much as $200 billion this yr on AI initiatives, greater than any of the opposite hyperscalers, which mixed have forecast practically $700 billion in 2026 expenditures. Most of Amazon’s spending is anticipated to go to information facilities, chips and networking gear.

Wall Avenue has considered Amazon’s capex plans skeptically, sending the corporate’s shares down for 9 days straight following its Feb. 5 earnings report and shaving greater than $450 billion off of its market worth.

Amazon’s investments aren’t restricted to AI compute. The corporate has additionally put important assets and expertise behind creating AI instruments throughout all of its companies. It has additionally rolled out a collection of AI fashions and revamped its Alexa assistant. It additionally has invested $8 billion in Anthropic since 2023.

— CNBC’s Robert Hum contributed to this report