Amazon surpasses Walmart in annual revenue for the first time

Amazon said earlier this month that it generated $716.9 billion in revenue in 2025. That beat Walmart’s sales last year, which totaled $713.2 billion, the company reported Thursday.

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

Amazon surpassing Walmart in annual revenue sharpens the already intense rivalry between the two retail giants. It also marks a symbolic shift in the balance of power between the two companies, underscoring how a business originally defined as e-commerce has evolved into a technology and services giant. This achievement not only reflects Amazon’s retail scale, but also the growing weight of cloud computing, advertising and the third-party seller ecosystem – businesses that have helped drive faster growth than its competitors.

“There are questions about where Walmart’s next innovation will come from,” said Sky Canaves, principal analyst at eMarketer. “Amazon has transformed itself into a technology and services company, with the cloud and advertising doing much of the work. Walmart is still trying to prove it can make a similar 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 include commissions as well as fulfillment, shipping, advertising and customer support costs – accounted for about 24% of total sales last year, while Amazon Web Services accounted for nearly 18%.

Walmart has borrowed Amazon’s playbook in its efforts to keep sales rising. For example, the retailer runs its own third-party marketplace and offers fulfillment services, both of which are increasingly appealing to Amazon sellers. Like Amazon, Walmart is also an ad sales machine, although its ad business lags far behind Amazon in terms of revenue — Amazon’s ad revenue topped $68 billion last year, while Walmart’s ad unit generated $6.4 billion.

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

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

Shopping gap

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

One area where Walmart still beats Amazon is grocery stores; groceries currently account for about 60% of the Bentonville, Arkansas retailer’s sales. Even though Amazon commands a dominant share of the e-commerce market – the company controls 40% of online shopping in the US – grocery remains 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, turning some sites into Whole Foods Market stores.

According to data from Numerator, Amazon accounts for only a small portion of overall grocery spending in the US, which counts food and drink sales, but does not count alcohol and non-food sales. In September, Walmart claimed 21% of overall grocery spending, while Kroger earned 8.5%. Amazon and Whole Foods, on the other hand, each control 1.6% of the market. Amazon said Numerator’s data is less representative of Amazon in the grocery market because it does not include non-food CPG products, which are typically ordered through its e-commerce site.

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

Amazon remains focused on increasing its share of the grocery market to compete with Walmart. One way Amazon does this is by providing faster shipping, especially for perishable items. The company announced earlier this month that US Prime Minister members received more than 8 billion items on the same or next day in 2025, an increase of more than 30% compared to the previous year, with groceries and daily necessities accounting for 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 megastore in the Chicago area after announcing plans last month to build 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 brick-and-mortar 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 increasingly exploring new brick-and-mortar retail supercenters, emulating Walmart by offering Amazon’s wide selection of groceries, staples and general merchandise.”