Two retail giants. Two stocks that have beaten the S&P 500 this year. But when you line up the numbers, revenue growth, profit margins, valuation, and long-term catalysts, the contest between Amazon and Walmart looks less like a horse race and more like a foregone conclusion.
That is the core argument in a recent Motley Fool analysis by Marc Guberti, who examined the two largest retailers in the world side by side and concluded that "picking a winner between these two stocks is surprisingly easy." For investors who value free-market competition and honest accounting, the comparison is worth walking through in detail.
Amazon posted a 12.7 percent compound annual revenue growth rate over the past three years. Walmart managed 5.1 percent over the same stretch. Amazon leads Walmart in five-year, ten-year, fifteen-year, and twenty-year revenue growth rates as well. That is not a blip. It is a structural gap.
Amazon's most recent fourth quarter delivered 14 percent year-over-year revenue growth, with total company sales hitting $213.4 billion. Its cloud computing arm, AWS, and its online advertising business each grew by more than 20 percent. Amazon's custom AI chips alone now produce more than $10 billion in annual revenue.
Walmart's fiscal 2026 fourth quarter, which ended January 31, showed 5.6 percent year-over-year revenue growth. Respectable for a brick-and-mortar chain, but less than half of Amazon's pace. And Walmart still derives almost all of its revenue from physical locations, a model that carries higher costs and thinner margins.
That margin difference matters. Amazon's profit margins outstrip Walmart's, and the gap feeds directly into the valuation question. Amazon trades at a price-to-earnings ratio of 34.7. Walmart sits at 45.3. In plain terms, investors pay more per dollar of Walmart's earnings than they do for Amazon's, even though Amazon is growing faster.
For anyone who believes markets should reward companies that deliver results rather than coast on legacy scale, that valuation mismatch is hard to ignore.
The divergence between these two companies is not new. Back in 2015, Amazon's market capitalization surged past Walmart's for the first time after a surprisingly strong quarterly profit. Amazon reported a second-quarter profit of $92 million, 19 cents a share, when analysts expected a 13-cent loss. Revenue jumped 20 percent to $23.2 billion on the strength of electronics and general merchandise sales. As the New York Post reported at the time, Amazon's market value rose roughly $40 billion in a single session to about $265 billion, leapfrogging Walmart's $234 billion.
Two years later the gap had doubled. Amazon shares topped $900 for the first time, lifting the company's market value to approximately $430 billion, roughly twice Walmart's $220 billion, Breitbart noted. Analysts at BMO Capital Markets and Susquehanna Financial Group set price targets above $1,200, signaling they saw more upside ahead.
Walmart, meanwhile, has stumbled at key moments. The Washington Examiner observed that Walmart's stock once fell more than 10 percent in a single day, erasing nearly $31 billion in value, after a weak quarter marred by online inventory restocking problems that left in-demand items out of stock. Over the prior year, Amazon's stock value had risen at three times the pace of Walmart's, and Amazon's market capitalization had become more than two and a half times its rival's.
None of this means Walmart is standing still. The Bentonville giant has poured money into e-commerce and advertising, and Guberti acknowledges that Walmart's high growth rates in those segments are real. Walmart has also been converting store back rooms into fulfillment warehouses to chase same-day delivery, a direct response to Amazon's logistics dominance.
The company has invested in modernization on multiple fronts. It recently announced plans to replace paper price tags with digital displays across all U.S. stores, a move aimed at cutting labor costs and improving pricing agility.
And in the grocery aisle, still Walmart's stronghold, the retailer has been overhauling its Great Value private-label brand to hold price-conscious shoppers as inflation lingers.
These are sensible moves. But they are defensive. Walmart is spending heavily to compete in territory Amazon already owns, while Amazon expands into cloud computing, artificial intelligence, and digital advertising, businesses with margins that a grocery-and-general-merchandise chain simply cannot match.
The bull case for Amazon rests on more than retail. AWS and advertising already grow at more than 20 percent a year. Custom AI chips represent a $10 billion-plus annual revenue line that barely existed a few years ago. These segments carry far higher margins than selling household goods at thin markups.
Walmart's bull case, by contrast, leans on its massive physical footprint and the assumption that e-commerce and advertising revenue will keep accelerating. That is possible. But Guberti's analysis points out that Walmart still depends on brick-and-mortar sales for the vast majority of its top line, a segment where growth is inherently slower and costs are inherently higher.
Amazon has also shown a willingness to use its scale aggressively, including imposing surcharges on third-party sellers when fuel costs rise. That kind of pricing power over its own marketplace ecosystem is something Walmart cannot replicate.
Both stocks have outperformed the S&P 500 year to date. Both companies have delivered strong long-term returns. But the revenue growth trajectories have been diverging for years, and the most recent quarters only widened the spread.
A 34.7 P/E ratio for the faster-growing company. A 45.3 P/E ratio for the slower one. That inversion tells you the market is pricing Walmart on hope, hope that its digital transformation will eventually close the growth gap, while pricing Amazon on demonstrated performance.
Conservative investors tend to favor companies that earn their valuations rather than borrow them from future promises. By that standard, Amazon's numbers speak clearly. Faster revenue growth. Better margins. A lower earnings multiple. And a portfolio of high-margin businesses, cloud, AI, advertising, that Walmart has no realistic path to matching.
Walmart remains a formidable company, and its role in feeding and supplying working families across America is nothing to dismiss. Retail events like Amazon's potential shift of Prime Day to late June show how aggressively both companies compete for consumer dollars.
But competition and investment merit are different questions. On the investment side, the numbers do not lie, and right now, they are not even close.
Guberti's analysis does not address every variable. What happens to Amazon's growth if tariff policy shifts or if regulators target its marketplace dominance? Can Walmart's advertising and e-commerce arms scale fast enough to justify a premium valuation? And how much of Amazon's AI-chip revenue depends on a handful of large enterprise clients?
Those are fair questions. But they do not change the core math. Over three years, five years, ten years, and twenty years, Amazon has compounded revenue faster, earned wider margins, and traded at a lower multiple relative to its growth rate.
Free markets reward the companies that deliver. Right now, one of these two is delivering a lot more than the other, and the stock price still gives you a better deal for it.