Walmart becomes first retailer worth $1 trn: What it means and what's next

Walmart on Tuesday became the first retail company in the world to reach a market value of $1 trillion. The company reached the milestone after a strong rally in its shares over the past year.

 

According to Reuters, Walmart’s stock has risen nearly 26 per cent over the last 12 months. Over the past decade, the shares have jumped about 468 per cent, much higher than the S&P 500’s gain of around 264 per cent.

What it means

Walmart’s entry is significant because trillion-dollar valuations are usually linked to technology firms. With the latest stock rally, Walmart joins a small group of companies valued at $1 trillion or more.

 

Who else is in the $1 trillion club?

Other companies with a market valuation of over a trillion dollars include Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta, Taiwan Semiconductor Manufacturing Company, Tesla, and Broadcom, among others.

 

According to BankRate, chip giant Nvidia has the highest market capitalisation of $4.3 trillion, followed by Microsoft at $3.8 trillion, Apple at $3.5 trillion, Alphabet at $3.0 trillion, and Amazon at $2.5 trillion.

How Walmart managed to join $1 trn club

According to Reuters, Walmart’s rise is driven by a mix of strategies. The company has attracted higher-income customers looking for value and convenience, while also keeping its traditional base of lower-income shoppers.

 

In the last five years, Walmart has sharply expanded its online business. It now offers over half a billion items online, rolled out one-hour delivery, launched Walmart+ to compete with Amazon Prime, and built a $4-billion advertising business that improved its profits.

 

Walmart also invested heavily in artificial intelligence (AI). Reuters reported that it spent billions on AI-powered supply chains to improve inventory planning, deliver fresher produce and speed up deliveries. These moves helped Walmart beat US same-store sales estimates for 15 straight quarters, the report said.

Challenges ahead

Despite the milestone, challenges remain. Walmart is in a tight race with Amazon in AI-powered shopping tools. It has partnered with OpenAI and Google to plug its shopping services into AI chatbots, as part of efforts to close the gap with Amazon’s AI assistant, Rufus.

 

The company opened its first store in Arkansas in 1962 and now runs about 4,600 stores across the US Walmart went public in 1970, joined the Dow Jones index in 1997, and has long been part of the S&P 500.