Amazon Surpasses Walmart in Annual Revenue for the First Time

Why It Matters

The revenue crossover signals a rebalancing of power toward higher‑margin digital services, forcing both retailers to accelerate technology and omnichannel strategies.

Key Takeaways

• Amazon revenue $716.9B beats Walmart $713.2B.
• AWS and ads drive higher-margin growth.
• Walmart still leads grocery with 60% sales.
• Both firms ramp AI and delivery investments.

Pulse Analysis

Amazon's $716.9 billion 2025 revenue eclipsed Walmart's $713.2 billion, ending the retailer's 13‑year reign atop Fortune's list. The crossover reflects Amazon's evolution from pure e‑commerce to a diversified tech conglomerate, where cloud services, advertising and marketplace fees now account for a sizable share of earnings. Analysts view the milestone as a bellwether for the broader shift toward digital‑first business models, signaling that scale in high‑margin services can outweigh traditional brick‑and‑mortar volume.

Amazon's growth engine now leans heavily on Amazon Web Services, which contributed nearly 18 % of total sales, and its advertising platform, which generated over $68 billion last year. Third‑party seller services, encompassing fulfillment, commissions and ad fees, represent roughly a quarter of revenue, boosting margins while expanding the ecosystem. This diversification reduces reliance on low‑margin retail and gives Amazon pricing power in the cloud and ad markets, pressuring competitors to develop comparable high‑margin offerings or risk margin erosion.

Walmart is doubling down on its grocery dominance, which still accounts for about 60 % of its sales, while expanding its own marketplace and advertising units to close the gap. Strategic AI partnerships, such as the recent deal with Google’s Gemini, aim to enhance product discovery and supply‑chain efficiency. Meanwhile, Amazon is accelerating physical‑store growth with new Whole Foods locations and a test of 30‑minute delivery, underscoring a convergence where both rivals blend online convenience with brick‑and‑mortar presence to capture the next wave of consumer spend. The outcome will shape retail's profit trajectories for years.