The best stock to buy right now: Amazon vs. Walmart

Walmart (NYSE:WMT) And Amazon (NASDAQ:AMZN) are the two US companies with the highest sales in this order. However, Amazon is closing the gap and should soon overtake Walmart.

You might think it’s obvious that Amazon, with all its artificial intelligence (AI), is the better buy today. But not so quickly. Let’s see why it might not be as easy as you think.

Amazon is the largest e-commerce company in the country and also the largest cloud computing company in the world. These two companies make it an impressive company that’s hard to beat, and both industries are growing quickly and offer incredible organic growth opportunities.

But it’s about much more than just organic growth opportunities and much more than e-commerce and cloud computing. Let’s start with AI because it’s on everyone’s mind today. CEO Andy Jassy said that the AI business is already generating billions of dollars and that he believes this is just the beginning.

He believes the cloud business has just been disrupted, and he envisions companies embracing cloud solutions at a scale we can’t really imagine right now. Amazon is investing heavily in all types of AI to prepare for this shift, and it could be a game-changer for the company.

It is still the leader in e-commerce by far, accounting for more than a third of all US e-commerce. Walmart is in second place, but only has about 6% of the total market. Amazon could expand its lead by modernizing its systems, such as introducing new robotic technology that reduces processing time by 25%. It is constantly improving the speed and expanding coverage of its same-day deliveries to strengthen the loyalty of Prime members and ensure they continue to shop on Amazon.

It has a competitive streaming service, a strong advertising business that generates billions quarterly, and many other segments such as healthcare and devices that create a business venture unmatched.

Walmart has 4,600 stores in the United States and about 10,600 worldwide under various local brands. Despite its size, the company continues to record increasing sales and profits. That’s because, like Amazon, the company is constantly evolving its platform and finding ways to innovate and resonate with its customer base.

Nowadays this happens, among other things, via digital channels. Although the company is far behind Amazon in e-commerce, it has a significant advantage in its store network. It can offer omnichannel options that Amazon cannot, and customers are increasingly adopting the omnichannel model.

This also makes Walmart known to more people and wealthier consumers, as the company can offer a wider selection of non-essential products online that appeal to this type of shopper. Walmart’s e-commerce sales rose 27% year-over-year in its fiscal third quarter of 2025 (ended Oct. 31).

Investors should also consider Walmart’s dividend. It’s not the highest yielding dividend, but it is stable and growing. The yield is 0.9% at the current price, lower than usual because the stock is so high.

Depending on when you look back, Walmart and Amazon have outperformed at different times. Walmart is much older than Amazon – it went public in 1970, giving it a 27-year lead over Amazon. That represents a market-breaking gain of 677,000%. Amazon has gained 232,000% since its IPO in 1997.

That’s in the past, but my point is that it’s not so clear that Amazon easily crushed Walmart over time. In fact, while Walmart stock has gained three times as much as Walmart stock over the past decade, they have made the same profit over the past five years, and Walmart has outperformed over the past three years.

Amazon’s perceived edge over AI may not be as valuable to the market as Walmart’s stability and retail power. Despite Amazon’s strong performance this year and enthusiasm for AI, Walmart is doing even better at the end of the year:

AMZN total return level chart — AMZN total return level; Data from YCharts.

Let’s compare the current performance.

Metric	Q3 24	Q2 24	Q1 24	Q4 23
Amazon sales growth	11%	10%	13%	14%
Walmart sales growth	5.5%	4.8%	6%	5.7%
Amazon operating income growth	55%	91%	218%	389%
Growth in Walmart’s operating profit	8.2%	8.5%	9.6%	30.4%

Data source: Amazon and Walmart quarterly reports. Walmart’s quarters are for fiscal year 2025.

Even though Amazon has performed better, the market currently appreciates Walmart’s durability and value. Amazon has a real advantage in AI, but Walmart has a real advantage in stability.

I’d say if you’re looking for growth and have a greater appetite for risk, Amazon is still your stock, even if Walmart is doing better this year. If you’re looking for value and passive income, Walmart is your choice, and its stock performance isn’t too bad either.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil 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.

The Best Stock to Buy Right Now: Amazon vs. Walmart was originally published by The Motley Fool

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