Walmart Lost This Key Title to Amazon for the First Time in Company History -- Is It Still a Buy?

There's been a passing of the torch at the very top of the Fortune 500. For the first time, Amazon's business surpassed Walmart's (NASDAQ: WMT) business in terms of overall revenue and became the world's largest company by measure of sales.

In Walmart's 2026 fiscal year, which ended Jan. 30, the company recorded revenue of $713.2 billion. Meanwhile, Amazon recorded sales of $716.9 billion in the past year. Is Walmart still a worthwhile long-term investment now that Amazon is surpassing its rival in sales, or is the company on track to get left behind?

Image source: Getty Images.

Is Amazon leaving Walmart in the dust?

Amazon's recent ascension to the throne of the world's largest business by revenue is a meaningful win for the company. The tech giant has long prioritized expanding the infrastructure and reach of its online retail business at the expense of higher margins and profitability, and this approach has helped facilitate incredible growth for the e-commerce giant. But while the significance of Amazon's wins shouldn't be discounted, that doesn't mean Walmart is in bad shape.

Notably, while Amazon exceeded Walmart in overall revenue last year, the tech giant's sales picture also benefited from its Amazon Web Services cloud infrastructure service business, its digital-advertising wing, and other units. When it comes to just comparing each company's retail units, Walmart is still bigger by revenue. Walmart is also seeing strong growth in its digital-advertising business, with category revenue rising 46% to reach $6.4 billion in the company's last fiscal year.

Is Walmart keeping pace in high-tech categories?

Like Amazon, Walmart benefits from one of the largest and most efficient supply chains and distribution networks in the world. While the broader physical retail industry will likely continue to face headwinds from the rise of e-commerce, Walmart's corner of the market appears relatively resilient. The company is also making big strides of its own in the e-commerce space.

While Walmart's business is less tech-focused than Amazon's and doesn't benefit from a high-margin cloud services component like Amazon Web Services, it would be a mistake to assume the retail giant is resting on its laurels and awaiting disruption.

Walmart has been making moves to ensure that it's one of the retail space's top beneficiaries of robotics and artificial intelligence trends. The company's close partnership with Symbotic is just one of the promising initiatives driving automation and efficiency improvements that could translate into big wins for long-term shareholders. So while Amazon deserves a lot of credit and plaudits for scaling to become the world's largest company by revenue, Walmart stock could still be worth a look for investors seeking retail-shopping exposure.

What about the valuation profile?

Walmart's share price has marched roughly 32% higher over the past year. As of this writing, the stock trades at roughly 45 times this year's expected earnings.

The company also pays a dividend yielding roughly 0.8% at current prices. That's not much of a dividend, but the retail giant has a sterling track record of delivering payout growth. The company has raised its payout annually for 53 years running, and it's likely Walmart will continue that streak for the foreseeable future.

Even though the company has very strong business foundations and should be able to continue increasing the cash it returns to shareholders through dividends, I don't think the stock looks particularly cheap right now. Walmart's revenue increased roughly 5% on a currency-adjusted basis last year. Meanwhile, non-GAAP (adjusted) operating income rose 10.8%, or 10.5% on a currency-adjusted basis. For a company posting these levels of growth, Walmart commands a substantial valuation premium.

Walmart continues to look like a very strong company, and I wouldn't be surprised if it delivered solid returns for long-term investors who buy shares at today's levels. If automation initiatives unlock major efficiencies across the company's supply chains, the stock could even deliver market-crushing returns. On the other hand, the company's current valuation premium makes it hard for me to get too excited about the stock right now -- and I expect Amazon to outperform it over the next decade.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Symbotic, and Walmart. The Motley Fool has a disclosure policy.