Walmart Isn't the Biggest Company in the U.S. Anymore, but Here's the Surprising Catalyst That's Driving Growth

With the fourth-quarter results released, Walmart (NASDAQ: WMT) has dropped behind Amazon to become the second-largest company in the U.S. by sales.

But it would be a mistake to think Walmart has lost its top-stock status. It has many excellent features, and there's one surprising growth catalyst today that makes the stock looked primed for higher gains.

Image source: Walmart.

Second to Amazon, but growing in e-commerce

Amazon has finally topped Walmart to become the largest company in the world by sales, but the latter is growing, ironically, with Amazon's forte -- e-commerce. Walmart was late to the digital party, but it's now up to speed, and it has a huge advantage over Amazon with its huge base of physical stores.

Amazon gains market share by increasing delivery speed, and it's changed to a regional distribution model to get deliveries to customers faster. Walmart already has distribution hubs in its 5,200 stores, and 90% of the U.S. population lives within 10 miles of one of its stores. In the 2026 fiscal fourth quarter (ended Jan. 31), 35% of store-fulfilled orders were delivered by Walmart within three hours.

Not only can it get orders to customers quickly, it also creates more flexible options for customers, who can choose curbside pickup for a digital order. And then there are those who still prefer to shop in stores.

Walmart's total revenue increased 5.6% year over year in the fourth quarter, driven by a 24% increase in e-commerce sales. In the U.S., that was 27%, and although there was strength all around, sales from what it calls "expedited store-fulfilled delivery channels" were up more than 50%. In China, e-commerce revenue grew 28% and accounted for more than half of sales.

This is also helping profitability, since it includes advertising and membership fees, which are higher-margin features. Advertising sales increased 37% in the fourth quarter over last year, and membership fee income was up 15%.

A healthy long-term opportunity

The market found management's outlook somewhat disappointing, which briefly sent the stock down after earnings. Walmart is looking for slight growth from stores, but continued strength in e-commerce.

Walmart isn't likely to overtake Amazon in e-commerce, but Walmart's niche in the space (specifically its unmatched store base) gives it an edge that makes it a real player. It should be able to keep reporting robust e-commerce growth, and together with its other great features -- which include its ability to reach U.S. consumers nearly everywhere and its discount prices that create resilience -- it should continue to grow and reward shareholders.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.