Why Walmart May Be Worth a Full Restatement

In February 2026, Amazon.com Inc. NASDAQ: AMZN The high value of Walmart Inc. NASDAQ: WMT as the largest company in the world by revenue. This did not surprise industry observers, but it was reinforced when Fortune confirmed the results, placing Amazon at the top of its Fortune 500 list.

These issues do not have a significant impact on the performance of any stock. As of June 8, both stocks are up just over 6% for the year.

But over the long term, it's Walmart that has rewarded shareholders with the greatest total return.

That's a story that may continue for a reason that may surprise some investors. The death of physical retail has been greatly exaggerated, and it is an arena in which Amazon simply cannot compete with Walmart.

Yet even that edge doesn't fully capture the real story: Walmart may be a stronger proxy for technology stocks than Amazon is for retail stocks. If that's the case, Walmart just isn't worth the premium rating—it may need to be completely rebranded.

Walmart's Physical Moat is a digital advantage

Amazon actually created the e-commerce category. So it makes sense that the company has an almost unassailable lead among online shoppers. But Walmart has made strides in closing that gap, and in doing so, it's showing why its business model has some advantages.

First, the company's retail space of more than 4,600 stores doubles as fulfillment centers, without the additional cost of building new buildings. This allows for roadside photography, which has become a familiarization tool for consumers. Also, the company can use those stores for same-day delivery, which Amazon can match in unit economics.

Walmart Connect (Advertising) Margin Story

The most underappreciated line item in Walmart's finances may come from Walmart Connect, the company's US retail news platform. In fiscal year 2026 (FY2026), Walmart Connect generated $6.4 billion in global ad revenue, a 46% YOY growth. In the most recent quarter, Walmart Connect grew 44% domestically, a rate that dwarfs the company's high single-digit growth.

This has a big impact on the bottom line. CFO John David Rainey noted that advertising and membership revenue now makes up about one-third of Walmart's operating profit. High-margin ad dollars effectively subsidize low-end sales activity, a volatility Wall Street recognized years ago when it estimated Amazon's multiples were high on the strength of its ad segment.

Even more remarkable, Walmart is still in the first innings. Advertising revenue represents about 1% of total sales, compared to about 8% for Amazon. That gap gives the company, and WMT, a long way to go—and investors who wait for Walmart's ad business to mature before repricing the stock may find themselves late to the trade.

Sam's Club as a proof of concept

If you want to see where the Walmart flagship is headed, check out Sam's Club. The 90 billion warehouse segment has become a clear indication that digital interaction and physical retailing are not in conflict.

Membership revenue posted double-digit growth for five consecutive quarters through Q4 2025, with digital penetration reaching record highs. Acceptance of Scan and Go—an app-based payment feature that allows members to skip the register entirely—increased 500 points in one quarter, and nearly 40% of Sam's transactions are now digital.

The Grapevine, Texas, prototype club operates with 100% Scan & Go participation. Members who shop digitally visit three times more often, purchase twice as many categories, and renew their membership at much higher rates.

Sam's Club has announced plans to remodel all of its 600 existing locations while opening up to 15 new clubs a year, with the stated goal of doubling membership over the next decade.

The Chart Points to an Inflection Point

WMT fell nearly 7% on the day of its FY2027 Q1 earnings report. The report showed a strong double-digit beat with a high single-digit year-over-year (YOY) gain. The point of contention was the direction, as it was with many sellers.

Specifically, Walmart is facing the unknown of higher tax-related costs and what that might mean for its core customer. That said, the selloff found a low near the 200-day moving average (SMA).

Analysts remain bearish on WMT with a consensus price target of $138.85. That's about 15% more than the price as of this writing. It will also confirm the stock highs made in February and May of this year.

2 Large Stocks—Completely Different Purposes

AMZN has been a great stock for long-term investors, and will continue to be for the foreseeable future. However, this is a matter of knowing where the revenue growth is coming from. For Amazon, that increasingly means Amazon Web Services (AWS), which is estimated at $128.7 billion in revenue by 2025.

Amazon still brought in $588.2 billion in retail-related sales, but that number is less than Walmart, which comes from its combination of physical locations and growing digital efforts.

Reliance on retail is the reason Walmart pays a dividend and Amazon doesn't. But even if that profit is small, it is a safe payment that has increased for 53 years in a row. And this year it will make 54. After the stock split in January 2024, WMT is attractively priced for investors to start accumulating and allowing the compounding effect to benefit.

Before you consider Walmart, you'll want to hear this.

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