The Rise of Amazon: Outpacing Walmart in Revenue and Market Cap



Key Takeaways:

* Amazon surpassed Walmart's market cap in 2015, but it took nearly a decade for its revenue to follow suit.
* Amazon's revenue has skyrocketed in recent years, driven by its expansion into cloud services, streaming video, and other ventures.
* Despite Amazon's diversification, retail operations remain its largest revenue generator.
* Investors who bet on Amazon's growth potential have seen impressive returns, outpacing Walmart and the S&P 500.

Amazon's Revenue Surges

After surpassing Walmart's market capitalization in 2015, Amazon's revenue continued to grow steadily. In its recent fourth quarter, Amazon reported sales of $187.8 billion, a 10% increase over the previous year. Walmart, which is set to release its numbers on February 20, is expected to report a 4% increase in revenue to $180 billion.

Diversification Pays Off

While Amazon initially competed directly with Walmart in retail, its diversification strategy has been a major driver of its growth. Amazon has expanded into various other segments, including cloud computing, streaming media, and advertising.

Cloud Computing Fuels Growth

Amazon Web Services (AWS), the company's cloud computing division, has been a major contributor to its recent growth. In the last quarter, AWS sales surged by 19%, underscoring its importance as a revenue driver.

Retail Remains King

Despite Amazon's diversification, its retail operations remain its largest source of revenue. Online sales, excluding subsidiaries like Whole Foods, grew by 7% in the fourth quarter, reaching $75.6 billion. This demonstrates the continued resilience of Amazon's core business.

Investor Returns

Investors who purchased Amazon stock on the day it surpassed Walmart's market capitalization have experienced significant returns. Amazon's stock has gained over 800%, compared to Walmart's 331% and the S&P 500's 193%.

Conclusion

Amazon's rise to prominence, outpacing Walmart in both revenue and market cap, is a testament to its successful diversification strategy and its ability to adapt to changing market dynamics. Investors who recognized the company's growth potential have been richly rewarded over the years.