Amazon vs. Walmart: Which Stock Will Outperform in 2026?

Core Viewpoint - In 2025, Walmart's stock outperformed Amazon's, with shares up over 25% compared to Amazon's modest gains, but Amazon is positioned for potential outperformance in 2026 [1]. Amazon - Amazon's current stock price is $230.23, with a market cap of $2462 billion and a gross margin of 50.05% [3][4]. - The company utilizes over 1 million robots in its fulfillment centers, coordinated through its Deepfleet AI model, enhancing efficiency in operations [4]. - AI is also employed to optimize delivery routes and improve logistics, contributing to an 11% revenue increase in North America and a 28% surge in adjusted operating income last quarter [5]. - Amazon Web Services (AWS) is the largest cloud computing service globally, with rapid growth driven by demand for AI services, leading to expected revenue acceleration [6]. - Valuation-wise, Amazon trades at a forward P/E ratio of approximately 29, making it cheaper compared to Walmart's over 38.5 [7]. Walmart - Walmart's current stock price is $115.28, with a market cap of $921 billion and a gross margin of 23.90% [8][10]. - The company has successfully shifted its focus to groceries, becoming the largest grocer in the U.S., which is less affected by e-commerce trends [10][11]. - Walmart's strategy includes a membership program, Walmart+, offering perks like free same-day delivery, which attracts more affluent customers [12]. - E-commerce revenue has consistently risen by over 20% for seven consecutive quarters, contributing to a 4.5% increase in U.S. same-store sales last quarter, with a 33% rise in Walmart Connect advertising revenue [13]. Conclusion - Walmart is viewed as a defensive stock due to its grocery sales, while Amazon is recognized for faster growth and a lower valuation, particularly with additional growth from AWS. Amazon is anticipated to be a strong rebound candidate in 2026 [14].