Walmart’s Slowdown Spotlights Amazon’s Strength

This was not the day to be a Walmart shareholder. Stock of the venerable retailer tumbled 9% after the company reported a dip in comparable sales for its U.S. stores in its fiscal second quarter ending July, even as the e-commerce part of its business grew 23%. The results were fine, really, although there’s no getting around the fact that Walmart is a mature business whose top line is expanding only around 5% annually, even with the boost provided by e-commerce and advertising.

What the results really pointed to is how well Amazon is doing in retailing, comparatively speaking. That’s easy to overlook, given how much attention its cloud unit, Amazon Web Services, gets on Wall Street, particularly now that AI has made cloud even more important to the tech sector. If you exclude AWS from the equation, Amazon’s retailing and associated businesses—including advertising—are growing at 14% to 15% annually. That’s not the rocket-ship growth tech companies usually expect, but it’s decent for a 30-year-old business. And it’s three times Walmart’s growth rate.