Amazon Claims Top Spot in Revenue, Outpacing Traditional Retailer Walmart Amidst E-Commerce Boom

In early 2025, Amazon overtook Walmart as the world’s largest company by revenue, marking a significant shift in the retail landscape. Despite Walmart reporting record revenues of $713.2 billion for the 12 months ending January 31, 2025, “$717 billion revenue total edged it ahead”. This development underscores broader structural changes in global commerce, particularly the acceleration of e-commerce and the rise of cloud computing as a revenue driver.

The Shift to E-Commerce: A Decade of Consumer Behavior Change

The most significant factor in Amazon’s revenue growth is the seismic shift in consumer spending toward online platforms. Over the past decade, U.S. e-commerce sales have grown from $350 billion to over $1 trillion, with Amazon capturing a dominant share of this expansion. By 2025, Walmart’s e-commerce sales, while growing at a double-digit rate, remain a smaller portion of its overall revenue. The “Financial Times notes that Walmart’s online sales represented approximately 12% of total revenue, compared to Amazon’s 45%”.

This divergence is partly due to the differing business models of the two companies. Amazon’s ‘everything store’ strategy—spanning retail, cloud computing, and entertainment—has allowed it to capture a broader customer base. Walmart, meanwhile, has focused on optimizing its 10,000+ physical stores and expanding its omnichannel capabilities. However, the physical retail sector has faced declining foot traffic, with U.S. retail sales in physical stores dropping by 6% in 2025, according to the “Financial Times”. This trend has pressured Walmart to invest heavily in its online infrastructure, including a $2 billion annual investment in digital transformation.

Amazon’s Cloud Computing Edge: AWS as a Revenue Engine

A critical differentiator for Amazon’s revenue growth is its Amazon Web Services (AWS) division, which contributed $129 billion to its 2025 revenue. AWS, launched in 2006, has become a cornerstone of Amazon’s profitability, offering cloud infrastructure and analytics services to businesses worldwide. The “Financial Times notes that excluding AWS, Amazon’s revenue would fall below Walmart’s”, highlighting the strategic importance of cloud computing in Amazon’s growth trajectory.

Walmart, while investing in its own cloud infrastructure through partnerships with Microsoft and Google, has not yet developed a comparable standalone cloud service. This gap underscores Amazon’s advantage in leveraging its technological ecosystem to generate recurring revenue streams. The “Financial Times also highlights that AWS’s expansion into emerging markets, such as India and Southeast Asia, has further bolstered Amazon’s global footprint”, contrasting with Walmart’s more regionally focused international strategy.

Operational and Strategic Divergences

Walmart’s operational model, built on its physical retail network, has historically provided stability. However, the rise of subscription-based services and convenience-focused offerings has challenged its traditional approach. Amazon’s Prime membership program, while not explicitly quantified in the sources, has created a sticky customer base that drives repeat purchases and data collection. Walmart’s recent efforts to replicate this model—such as its $100-per-year ‘“Walmart+” subscription_—have been introduced to compete in this space.

Another key factor is the pace of innovation. Amazon’s investment in artificial intelligence (AI) and automation, including its use of robotics in warehouses and AI-driven recommendation engines, has enhanced its supply chain efficiency. Walmart, while adopting similar technologies, faces challenges in scaling these initiatives across its vast and geographically diverse operations. The “Financial Times notes that Walmart’s reliance on third-party logistics providers has also limited its ability to fully integrate AI-driven optimization into its supply chain”.

Implications for the Retail Sector

The shift in revenue leadership between Walmart and Amazon signals a broader transformation in the retail sector. For Walmart, the challenge lies in balancing its legacy retail strengths with the need to accelerate digital innovation. The company has responded by investing in its e-commerce platform, expanding its private-label brands, and exploring partnerships with tech firms to enhance its digital capabilities. However, the “Financial Times warns that Walmart’s ability to maintain its market position will depend on its capacity to adapt to changing consumer preferences”, particularly among younger demographics that prioritize convenience and personalized experiences.

For Amazon, the challenge is to sustain its growth while managing regulatory scrutiny and competition from emerging players like Alibaba and Tencent. The “Financial Times highlights that Amazon’s dominance in e-commerce and cloud computing has created a ‘winner-takes-all’ dynamic”, making it difficult for rivals to catch up. However, the company’s reliance on a single business model—primarily retail and cloud services—could expose it to macroeconomic risks, such as inflation or supply chain disruptions.