Amazon Surpasses Walmart in Annual Revenue for First Time Amid AI Investment Surge

For the first time in history, Amazon has surpassed Walmart in annual revenue, cementing its position as the world’s largest retailer by sales volume. According to financial filings reported by CNBC, Amazon generated $716.9 billion in revenue for its most recent fiscal year, edging out Walmart’s $713.2 billion. The milestone, long anticipated after Amazon overtook Walmart in quarterly sales roughly a year ago, signals a pivotal moment in the evolution of global retail — one increasingly defined not by store count or square footage, but by algorithmic precision and artificial intelligence.

The shift reflects a fundamental reorientation in consumer behavior and corporate strategy. While Walmart has long relied on its vast network of physical stores and supply chain efficiencies, Amazon’s dominance stems from its integrated ecosystem: e-commerce, cloud computing (AWS), logistics, advertising, and subscription services. AI plays a central role across all these domains. From predictive inventory algorithms that reduce warehouse stockouts by up to 30% to personalized recommendation engines that drive nearly 35% of Amazon’s sales, the company has turned data into a competitive moat.

Walmart, meanwhile, has not stood still. As reported by CNBCTV18, the retail giant has accelerated its AI investments in recent quarters, deploying machine learning to optimize pricing, manage supply chain disruptions, and enhance its e-commerce platform. Walmart’s AI-powered checkout systems and automated fulfillment centers now process over 10 million orders weekly, and its partnership with AI startup Simbe Robotics has improved shelf-stock accuracy in stores by 25%. Yet despite these gains, Walmart’s revenue growth has been constrained by margin pressures and slower digital adoption compared to Amazon’s vertically integrated model.

The broader industry is watching closely. Analysts at Morgan Stanley note that Amazon’s lead is not merely financial but structural: its ability to monetize customer data across multiple revenue streams — from Prime subscriptions to ad placements on product pages — creates a flywheel effect that Walmart, as a primarily transaction-based retailer, struggles to replicate. Meanwhile, Amazon Web Services (AWS), which contributed over $90 billion in revenue last year, continues to subsidize retail losses and fund aggressive innovation in generative AI tools for sellers and logistics.

Both companies are now racing to embed AI into the next frontier: voice commerce, visual search, and autonomous delivery. Amazon’s Scout robots and drone delivery trials are expanding, while Walmart is testing AI-powered virtual shopping assistants on its app. The race is no longer just about who sells more — it’s about who can anticipate what customers want before they even search for it.

Investors are responding. Amazon’s stock has climbed 22% year-to-date following the earnings release, while Walmart’s shares rose 7%, reflecting market confidence in its AI turnaround. Yet the gap in market capitalization remains wide — Amazon is valued at over $1.8 trillion, compared to Walmart’s $650 billion — underscoring how the market now prizes scalable, tech-driven growth over traditional retail scale.

As regulatory scrutiny intensifies over data privacy and monopolistic practices, Amazon’s lead may invite new challenges. But for now, the milestone is clear: the future of retail belongs to the company that can turn algorithms into advantage. The era of the brick-and-mortar giant as the undisputed retail leader has ended. The age of the AI-powered commerce platform has begun.