Amazon vs. Walmart: Which Retail Powerhouse Belongs in a Long-Term Portfolio?
- - Amazon vs. Walmart: Which Retail Powerhouse Belongs in a Long-Term Portfolio?
Marc Guberti, The Motley FoolJanuary 17, 2026 at 3:35 AM
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Key Points -
Walmart has more locations, which makes it easier to make same-day deliveries and reduce shipping fees.
Amazon is a more diversified business, with exciting growth opportunities in cloud computing, online advertising, and AI chips.
Walmart's ad business is driving margin expansion but makes up less than 1% of total revenue, limiting its impact for now.
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Amazon (NASDAQ: AMZN) and Walmart (NASDAQ: WMT) have established themselves as two of the top choices for various consumer products. Both retail stocks have used low pricing to make it more difficult for competitors to gain market share, but they took different directions toward long-term growth.
Walmart got started with physical locations and has more than 10,000 retail stores. Amazon started with e-commerce and has expanded into physical stores, but most of its revenue still comes from the internet. While both retail stocks have a place in most people's portfolio, there is a clear winner between the two.
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Red and white sale signs on store shelves.
Image source: Getty Images.
Walmart has the better logistics
No one can beat Walmart when it comes to logistics. The company has more than 10,000 stores, which all act as shipping centers. Customers can receive same-day delivery and free shipping on various purchases due to Walmart's vast network of retail locations.
Amazon's acquisition of Whole Foods netted more than 500 retail locations, but Whole Foods has far fewer products available than your typical Walmart. Amazon has more than 1,300 shipping facilities, but that still puts the company at a disadvantage against Walmart.
Amazon is growing faster
Having more locations doesn't guarantee more success in retail. While Walmart looks poised to reach a $1 trillion market cap this year thanks to its spread-out retail stores, Amazon is actually growing at a faster rate if you look at overall revenue. Furthermore, Amazon's online store sales grew by 10% year over year, while Walmart only registered 5.8% year over year revenue growth across the entire company.
Part of the reason Amazon is growing faster is due to its exposure to multiple industries. While Walmart makes most of its revenue from retail shopping, Amazon has diversified into cloud computing, online advertising, AI chips, and other verticals.
Cloud computing and online advertising, in particular, also contribute to higher profit margins. Amazon Web Services revenue surged by 20% year over year thanks to high AI demand, while online ad sales were up by 24% year over year. Walmart isn't nearly as diversified.
Walmart's ad segment is a small slice of the pie
Walmart has made it a point to highlight its growing online advertising business in recent quarters. Growth rates continue to look good based on the ad segment's 53% year-over-year growth rate in the third quarter of its fiscal year 2026.
However, it will take a while for online ads to translate into substantial profit margin expansion. The company earned $681 billion in fiscal 2025, and $4.4 billion of that came from ads. While Walmart's ads can become a meaningful growth opportunity in the long run, this segment makes up less than 1% of Walmart's total sales.
Meanwhile, Amazon made $17.7 billion from online ads in Q3 2025 compared to $180.2 billion in total revenue. Amazon Ads make up almost 10% of total revenue, allowing it to impact margins more than Walmart's advertising business. Amazon also made $33 billion from Amazon Web Services that quarter, showing that high-margin businesses are driving Amazon's expansion.
Although Walmart has been the winner over the past five years, Amazon looks destined to flip the script and reward investors in 2026. Both stocks are solid, but Amazon looks like the better pick.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.
Source: “AOL Money”
