Klarman buys after revenue crown over Walmart

After a landmark year in which Amazon stock benefited from record sales and cloud demand, the company has quietly attracted one of Wall Street’s most respected value investors.

Amazon overtakes Walmart as America’s largest company by revenue

Amazon has ended Walmart‘s 24-year run as America’s largest company by revenue, underscoring a decisive shift in U.S. retail and technology. The company reported $716.9 billion in annual revenue for 2025, narrowly topping Walmart’s $713.2 billion. However, the underlying growth rates highlight an even more significant divergence between the two giants.

Walmart first captured the top spot in 2001, displacing Exxon Mobil and holding the title every year until now. Moreover, the retailer had long been viewed as the benchmark for scale in U.S. commerce. Amazon’s latest numbers now challenge that narrative and signal that digital-first business models are gaining structural dominance.

The growth gap tells the story. Amazon’s revenue grew 12.4% in 2025, while Walmart managed just 4.7%. At those respective rates, the margin between them is likely to keep widening over the coming years, especially if Amazon sustains its current momentum in higher-margin businesses.

Why Amazon is growing faster than Walmart

Around 90% of Walmart‘s revenue still comes from its stores and website, reflecting a predominantly traditional retail model. Amazon, by contrast, draws income from a broader mix that includes third-party seller fees, fulfillment services, digital advertising, and cloud computing. That said, retail remains a critical foundation for Amazon’s ecosystem.

AWS grew 20% year over year and now accounts for roughly 18% of Amazon’s total revenue. Moreover, advertising and fulfillment services continue to expand at a healthy pace, contributing to a richer and more diversified revenue base than Walmart’s. This diversity is increasingly important as consumer spending patterns shift.

That mix gives Amazon a structural advantage in growing its top line, even if its core retail segment does not consistently outsell Walmart on a product-by-product basis. However, it also means the company is more exposed to technology cycles and enterprise IT budgets through its cloud business.

Amazon’s U.S. retail market share now sits at around 9%, up from roughly 6% before the pandemic. Walmart’s share is approximately 7.6%, roughly flat over the same period. This shift suggests Amazon is steadily gaining share in core retail while also building out higher-margin services on top.

Logistics investments and same-day delivery expansion

The company is also investing $4 billion to build same-day delivery hubs in rural America, extending a logistics network that already dominates many urban markets. Moreover, these investments aim to make rapid delivery a standard expectation for a broader swath of U.S. consumers, not only city residents.

In 2025, 100 million customers ordered items for same-day delivery, the fastest speeds Amazon has ever recorded. That said, the scale of investment suggests management sees even more room to compress delivery times and deepen customer loyalty through speed.

Seth Klarman bets big on AMZN

While the revenue milestone captured headlines, billionaire value investor Seth Klarman was quietly building a substantial position in Amazon throughout Q4 2025. His moves suggest that, in his view, the market is underestimating the long-term earnings power embedded in the current business mix.

Klarman’s fund, Baupost Group, invested nearly $500 million in Amazon during the quarter, making it the fund’s second-largest holding at 9.3% of the total portfolio. Moreover, such concentration underscores a high level of conviction for a manager known for caution and selectivity.

He funded part of this pivot by trimming his Alphabet position by 41%. Alphabet’s stock surged roughly 65% through 2025, pushing its forward P/E from around 20 in August to around 30 by December. For a value-focused investor, that multiple moved into expensive territory relative to historical norms.

Amazon, by contrast, rose just 5% over the same period. That underperformance appears to be exactly what caught Klarman’s eye, as it widened the valuation gap between two of the largest U.S. technology and internet platforms.

What comes next for amazon stock and AWS

AWS revenue grew 24% year over year in Q4, accelerating from its full-year cloud growth rate. Moreover, this performance came as enterprises ramped up spending on AI infrastructure and data services, areas where AWS maintains a leading position.

Amazon is guiding for 11–15% revenue growth next quarter, significantly ahead of Walmart‘s guidance of 3.5–4.5%. If those ranges hold, the revenue gap between the two companies could widen further in the near term, particularly as more activity shifts online.

The company plans to spend $200 billion in capital expenditures in 2026 to meet surging demand for AI cloud services. Amazon has said that AWS demand has been outpacing supply, highlighting the need for aggressive infrastructure build-out. However, such large-scale spending will also be closely watched by investors for its impact on free cash flow.

Amazon stock currently trades below the price at which Seth Klarman established his Q4 position, a detail that value-oriented traders will not overlook. Analysts project around 20% earnings growth in 2027, with the share price trading at roughly 22 times their 2027 earnings estimates. For long-term investors, that combination of growth and valuation is central to any thesis on the company’s future.

In summary, Amazon’s move past Walmart in revenue, rapid AWS expansion, and heavy capital spending plans are reshaping its investment profile. Combined with Seth Klarman’s sizable commitment, these dynamics position the company as a key battleground stock for investors weighing growth, valuation, and the future of global retail and cloud computing.