Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) are the two largest U.S. companies by sales, in that order. However, Amazon is closing the gap and is likely to soon overtake Walmart.
You might think it’s obvious that Amazon, with all of its artificial intelligence (AI), is the better buy today. But not so fast. Let’s see why it may not be as simple as you think.
Amazon is the largest e-commerce company in the country, and it’s also the largest cloud computing company in the world. These twin businesses make it a formidable enterprise that’s hard to beat, and both of these industries are fast-growing, providing incredible organic growth opportunities.
But it’s much more than organic growth opportunities, and much more than e-commerce and cloud computing. Let’s start with AI, since that’s what’s on everyone’s mind today. CEO Andy Jassy said that the AI business is already bringing in billions of dollars, and he thinks it’s just the beginning.
He believes that the cloud business has barely been cracked open, and he envisions companies turning toward cloud solutions at levels we can’t really imagine right now. Amazon is heavily investing in all kinds of AI to be ready for that shift, and it could be a game-changer for the company.
It’s still tops in e-commerce, by far, accounting for more than a third of all U.S. e-commerce. Walmart is second, but it has only about 6% of the total. Amazon could be widening its lead by upgrading its systems, such as introducing new robotics technology that’s cutting processing time by 25%. It’s constantly improving speed and expanding its same-day delivery coverage, generating loyalty from Prime members and ensuring they keep shopping at Amazon.
It has a competitive streaming service, a robust advertising business that’s generating billions quarterly, and plenty of other segments like healthcare and devices that create an unmatched business enterprise.
Walmart has 4,600 stores in the U.S. and about 10,600 worldwide under different local banners. Despite its size, it consistently reports growth in sales and profits. That’s because, like Amazon, it is constantly upgrading its platform and finding ways to renew itself and resonate with its client base.
One way it’s doing that these days is through its digital channels. Although it’s way behind Amazon in e-commerce, it has a significant advantage in its store network. It can provide omnichannel options that Amazon can’t, and customers are increasingly embracing the omnichannel model.
