Amazon revenue exceeds Walmart after earnings reports

for the first time, Amazon It was taken off Walmart As the company with the largest annual revenues.

Walmart on Thursday reported annual revenue of $713.2 billion for its latest fiscal year, compared to Amazon’s revenue of $716.9 billion. This milestone has been brewing for months, with Amazon leapfrogging Walmart in quarterly sales for the first time in nearly a year.

The switch, while largely symbolic, highlights the battle retailers have had to identify and keep up with ever-changing consumer preferences. They are starting a new chapter in this rivalry as AI reshapes how companies operate, make money and increase sales.

Amazon rose to the top of the revenue list by doing more than just running a sprawling online web store and promising fast delivery. While its core retail unit is its largest revenue generator, its massive cloud computing, advertising and vending services businesses also fuel its sales. Third-party seller services, which include commissions and fees collected by Amazon’s service along with shipping, advertising and customer support, accounted for about 24% of the company’s total sales in 2025, according to its most recent annual filing. Amazon Web Services was responsible for approximately 18%.

It wasn’t just Walmart’s weakness that led to it losing its lead, as its revenues have doubled in 20 years. The retailer relied on more than 4,600 Walmart stores and nearly 600 Sam’s Club locations in the U.S. to support its digital business, which grew 27% in the U.S. in the fiscal fourth quarter and has posted double-digit percentage gains for 15 straight quarters.

This expansion came as Walmart distilled Amazon’s playbook and tried to position itself as a technology company as well as a retailer.

There have been multiple signs of its ambitions: Walmart relisted its stock, moving from the New York Stock Exchange to the tech-heavy Nasdaq in early December. Its market capitalization crossed the $1 trillion mark earlier this month, a valuation achieved almost exclusively by technology companies including Amazon, after rising more than 21% in the past year.

The big box retailer’s fourth-quarter earnings, boosted by digital advertising and the third-party marketplace, showed Walmart’s focus on chasing higher-margin companies and thinking outside the box of traditional retail.

In many ways, Walmart’s recent push to grow its third-party marketplace was an answer to Amazon’s platform dominance. Even as it tries to catch up with Amazon in some areas, Walmart is trying to gain an advantage in new frontiers.

Over the past few years, Amazon and Walmart have used various AI strategies to try to make their businesses more efficient and make their merchandise more attractive to shoppers.

Walmart struck a deal with OpenAI’s ChatGPT in October and Google’s Gemini in January to make it easier to discover and purchase its products. It also has its own AI-powered shopping 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 still in the early days of adopting AI, and it’s unclear how the technology will impact its business in the long term.

On the company’s earnings call Thursday, Walmart CEO John Furner said customers spend more when they use Sparky. Customers who use Sparky have an average order value about 35% higher than shoppers who don’t use the tool, he said.

About half of Walmart’s app users used Sparky, Walmart US CEO David Gogina said on the earnings call.

“Agent AI has been increasingly integrated across Walmart,” Gogina said. “It enhances our operations. It improves partner productivity, and it enhances the customer experience.”

John David Rennie, Walmart’s chief financial officer, said AI investments are included in the retailer’s full-year capital spending plans, which are expected to be about 3.5% of sales. These expenses also include the company’s investments in automation and store remodels.

There are limits to Walmart’s technology ambitions. When it comes to artificial intelligence, Rennie said Walmart will rely on the expertise of technology companies rather than trying to create its own products.

“As you can see from the announcements we’ve made, we’re approaching the development of AI through partnerships,” he said on the company’s earnings call. “This allows technology companies to do what they do best, develop innovative technology, and provides us with the clarity to do what we do best, translating the best of technology into retail experiences that create value for our customers, members and organization.”

Like Walmart, Amazon is also facing new pressures to respond to the rise of proxy commerce. Chatbot makers like OpenAI, Google And Perplexity introduced automated commerce features that aim to change the way people shop online.

While other companies like Walmart, Etsy and Shopify It announced shopping partnerships with AI platforms, and Amazon stayed on the sidelines. It blocked its customers from accessing its site, and doubled down on its chatbot, Rufus, which is powered by its own models and Anthropic’s chatbot Claude.

More than 300 million customers used Rufus and generated nearly $12 billion in additional annual sales last year, the company said. After slowly rolling out the service in beta two years ago, Amazon has introduced 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 artificial intelligence tools could help shoppers find products much like an employee in a physical store.

“I think agents will help customers with that kind of discovery,” Jassy said. “That’s part of the reason we’ve invested so much in Rufus, our shopping assistant.”

Meanwhile, Amazon is throwing piles of money into AI infrastructure. Earlier this month, it announced it would spend up to $200 billion this year on AI initiatives, more than any of the other hyperscalers, which in total forecast nearly $700 billion in 2026 spending. Most of Amazon’s spending is expected to go to data centers, chips and networking equipment.

Wall Street viewed Amazon’s capital expenditure plans skeptically, sending the company’s shares down for nine straight days after its February 5 earnings report and cutting more than $450 billion from its market value.

Amazon’s investments aren’t limited to AI computing. The company has also dedicated significant resources and talent to developing AI tools across its businesses. It is too It has introduced a range of artificial intelligence models, and revamped its Alexa assistant. It has also invested $8 billion in Anthropic since 2023.

— CNBC’s Robert Home contributed to this report