Investment Comparison: Amazon vs. Walmart
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy AMZN?
Source: Fool
- Revenue Growth Comparison: Amazon's compound annual growth rate (CAGR) over the past three years stands at 12.7%, significantly outpacing Walmart's 5.1%, indicating Amazon's rapid market share gains, particularly in cloud computing and online advertising, which bolster its financial performance.
- Financial Performance Analysis: Amazon reported total sales of $213.4 billion in Q4, reflecting a 14% year-over-year growth, with cloud computing and online advertising segments growing over 20%, while Walmart's revenue growth in the same quarter was only 5.6%, highlighting Amazon's advantage in diversified revenue sources.
- Profit Margins and Valuation: Amazon boasts a gross margin of 50.29%, significantly higher than Walmart's 23.41%, and its price-to-earnings (P/E) ratio of 34.7 is lower than Walmart's 45.3, indicating that Amazon maintains a more attractive valuation while achieving faster growth.
- Investor Choice Recommendation: Although Walmart has performed well over the past five years and is suitable for retirees seeking stable income, Amazon emerges as the more appealing investment choice due to its higher growth potential and lower valuation, especially in the context of future market competition.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy AMZN?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's Cloud Computing Business Sees Strong Growth
- Profit Contribution from Cloud: In Q4, Amazon Web Services (AWS) accounted for 50% of Amazon's operating profits despite only representing 17% of total sales, highlighting its immense potential as a profit driver and expected acceleration in growth.
- Significant Revenue Growth: AWS achieved a 24% revenue growth in Q4, marking its best performance in over three years, indicating strong market demand and the likelihood of continued profit increases for Amazon.
- Capital Expenditure Plans: Amazon plans to invest up to $200 billion in infrastructure expansion, which has raised some concerns; however, the company asserts that the long-term benefits to free cash flow will be substantial as AWS grows rapidly.
- Valuation Advantage: Amazon's operating cash flow multiple stands at 19 times, significantly lower than Apple's 29 times and Alphabet's 25 times, suggesting that now remains an opportune time to invest in Amazon, especially with AWS poised for explosive growth.
See More
Microsoft Stock Rebounds, Long-Term Outlook Positive
- Stock Rebound: Since the beginning of April, Microsoft's stock has surged over 14%, although it remains down more than 20% from its all-time high in October 2025, indicating strong market confidence in its long-term value.
- AI Threat Mitigation: By integrating the AI assistant Copilot into its productivity suite, Microsoft demonstrates a robust culture of innovation and strong enterprise relationships, effectively countering potential threats posed by AI and maintaining its core market share.
- Economic Resilience: A significant portion of Microsoft's revenue comes from subscription services, providing strong resilience during economic downturns, while its pricing power allows it to maintain its customer base even amid rising costs, further solidifying its market position.
- Reasonable Valuation: Despite the recent stock price increase, Microsoft's forward P/E ratio remains lower than the average of the
See More
Amazon's Space Race Against SpaceX Heats Up
- Amazon's Investment Plans: Amazon plans to invest over $10 billion in its low Earth orbit satellite project, Amazon Leo, but with its budget doubling, it faces competitive pressure from SpaceX, which could lead to declining free cash flow for several years.
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for approximately $11.6 billion, which operates 24 satellites and holds key radio spectrum licenses, could accelerate the deployment of Amazon Leo and enhance its competitiveness against SpaceX's Starlink.
- Launch Capacity Bottleneck: Amazon's reliance on external companies for satellite launches, in contrast to SpaceX's ability to launch its own rockets, has resulted in SpaceX being able to deploy thousands of satellites annually, further solidifying its market lead.
- Increased Investment Risks: With projected capital expenditures reaching $200 billion by 2026, Amazon may face negative free cash flow, and while management is confident in returns from cloud computing and e-commerce, the investment in Leo carries higher uncertainty, prompting investors to proceed with caution.
See More
Microsoft's Resilience Amid AI Revolution
- Stock Recovery: Since the beginning of April, Microsoft's shares have surged over 14%, although they remain down more than 20% from their all-time high in October 2025, indicating market confidence in its long-term potential.
- AI Threat Mitigation: By integrating the Copilot AI assistant into its productivity suite, Microsoft demonstrates a strong culture of innovation and deep relationships with enterprises, enabling it to effectively address the challenges posed by AI and maintain its core market share.
- Stable Revenue Streams: A significant portion of Microsoft's revenue comes from subscription services, allowing it to maintain stable cash flow during economic downturns, while its pricing power enables it to pass on cost increases to customers.
- Dividend Growth Potential: Over the past decade, Microsoft has increased its dividends by nearly 153%, providing stable returns during market volatility, and combined with its AAA credit rating and strong free cash flow, it positions itself as a quality investment choice now.
See More
Amazon's Acquisition of Globalstar Accelerates Space Economy
- Amazon's Investment Plans: Amazon initially planned to invest $10 billion in 2020 for its low Earth orbit satellite constellation but has now decided to more than double its budget, reflecting its ambition in the space economy.
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for approximately $11.6 billion, which operates 24 satellites and holds key radio spectrum licenses, is expected to accelerate the progress of the Amazon Leo project.
- Satellite Deployment Progress: Despite aiming to deploy over 3,000 satellites, Amazon has only managed to deploy 241 so far, facing a July 30, 2026 FCC requirement, necessitating an expansion of its launch capacity.
- Investment Risks and Opportunities: With capital expenditures projected at $200 billion, Amazon may face negative free cash flow in 2026; however, management remains confident in returns from cloud computing and e-commerce investments, while the risks associated with the Leo project warrant attention.
See More
Analysis of U.S. Household Income and Wealth Definitions
- Income Benchmark: The U.S. median household income for 2024 is reported at $83,730, serving as a baseline for assessing household wealth and positioning within income tiers, reflecting overall economic conditions.
- Poverty Line Standards: The 2026 Federal Poverty Guideline is set at $21,640 for a two-person household, with near-poverty status extending to $32,460, highlighting economic pressures on low-income families and influencing social welfare policies.
- Middle-Class Definition: According to the Pew Research Center, middle-class household income ranges from $56,600 to $169,800, reflecting income disparities across regions and impacting consumer spending and economic stability.
- Wealth vs. Income: While an income above $170,000 is considered wealthy, factors like cost of living and debt can affect the perception of wealth, emphasizing the importance of financial management strategies.
See More
Amazon's Cloud Computing Business Sees Strong Growth
- Profit Contribution from Cloud: In Q4, Amazon Web Services (AWS) accounted for 50% of Amazon's operating profits despite only representing 17% of total sales, highlighting its immense potential as a profit driver and expected acceleration in growth.
- Significant Revenue Growth: AWS achieved a 24% revenue growth in Q4, marking its best performance in over three years, indicating strong market demand and the likelihood of continued profit increases for Amazon.
- Capital Expenditure Plans: Amazon plans to invest up to $200 billion in infrastructure expansion, which has raised some concerns; however, the company asserts that the long-term benefits to free cash flow will be substantial as AWS grows rapidly.
- Valuation Advantage: Amazon's operating cash flow multiple stands at 19 times, significantly lower than Apple's 29 times and Alphabet's 25 times, suggesting that now remains an opportune time to invest in Amazon, especially with AWS poised for explosive growth.
See More
Microsoft Stock Rebounds, Long-Term Outlook Positive
- Stock Rebound: Since the beginning of April, Microsoft's stock has surged over 14%, although it remains down more than 20% from its all-time high in October 2025, indicating strong market confidence in its long-term value.
- AI Threat Mitigation: By integrating the AI assistant Copilot into its productivity suite, Microsoft demonstrates a robust culture of innovation and strong enterprise relationships, effectively countering potential threats posed by AI and maintaining its core market share.
- Economic Resilience: A significant portion of Microsoft's revenue comes from subscription services, providing strong resilience during economic downturns, while its pricing power allows it to maintain its customer base even amid rising costs, further solidifying its market position.
- Reasonable Valuation: Despite the recent stock price increase, Microsoft's forward P/E ratio remains lower than the average of the
See More
Amazon's Space Race Against SpaceX Heats Up
- Amazon's Investment Plans: Amazon plans to invest over $10 billion in its low Earth orbit satellite project, Amazon Leo, but with its budget doubling, it faces competitive pressure from SpaceX, which could lead to declining free cash flow for several years.
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for approximately $11.6 billion, which operates 24 satellites and holds key radio spectrum licenses, could accelerate the deployment of Amazon Leo and enhance its competitiveness against SpaceX's Starlink.
- Launch Capacity Bottleneck: Amazon's reliance on external companies for satellite launches, in contrast to SpaceX's ability to launch its own rockets, has resulted in SpaceX being able to deploy thousands of satellites annually, further solidifying its market lead.
- Increased Investment Risks: With projected capital expenditures reaching $200 billion by 2026, Amazon may face negative free cash flow, and while management is confident in returns from cloud computing and e-commerce, the investment in Leo carries higher uncertainty, prompting investors to proceed with caution.
See More
Microsoft's Resilience Amid AI Revolution
- Stock Recovery: Since the beginning of April, Microsoft's shares have surged over 14%, although they remain down more than 20% from their all-time high in October 2025, indicating market confidence in its long-term potential.
- AI Threat Mitigation: By integrating the Copilot AI assistant into its productivity suite, Microsoft demonstrates a strong culture of innovation and deep relationships with enterprises, enabling it to effectively address the challenges posed by AI and maintain its core market share.
- Stable Revenue Streams: A significant portion of Microsoft's revenue comes from subscription services, allowing it to maintain stable cash flow during economic downturns, while its pricing power enables it to pass on cost increases to customers.
- Dividend Growth Potential: Over the past decade, Microsoft has increased its dividends by nearly 153%, providing stable returns during market volatility, and combined with its AAA credit rating and strong free cash flow, it positions itself as a quality investment choice now.
See More
Amazon's Acquisition of Globalstar Accelerates Space Economy
- Amazon's Investment Plans: Amazon initially planned to invest $10 billion in 2020 for its low Earth orbit satellite constellation but has now decided to more than double its budget, reflecting its ambition in the space economy.
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for approximately $11.6 billion, which operates 24 satellites and holds key radio spectrum licenses, is expected to accelerate the progress of the Amazon Leo project.
- Satellite Deployment Progress: Despite aiming to deploy over 3,000 satellites, Amazon has only managed to deploy 241 so far, facing a July 30, 2026 FCC requirement, necessitating an expansion of its launch capacity.
- Investment Risks and Opportunities: With capital expenditures projected at $200 billion, Amazon may face negative free cash flow in 2026; however, management remains confident in returns from cloud computing and e-commerce investments, while the risks associated with the Leo project warrant attention.
See More
Analysis of U.S. Household Income and Wealth Definitions
- Income Benchmark: The U.S. median household income for 2024 is reported at $83,730, serving as a baseline for assessing household wealth and positioning within income tiers, reflecting overall economic conditions.
- Poverty Line Standards: The 2026 Federal Poverty Guideline is set at $21,640 for a two-person household, with near-poverty status extending to $32,460, highlighting economic pressures on low-income families and influencing social welfare policies.
- Middle-Class Definition: According to the Pew Research Center, middle-class household income ranges from $56,600 to $169,800, reflecting income disparities across regions and impacting consumer spending and economic stability.
- Wealth vs. Income: While an income above $170,000 is considered wealthy, factors like cost of living and debt can affect the perception of wealth, emphasizing the importance of financial management strategies.
See More
