Walmart, the largest U.S. retailer, crossed a $1 trillion market capitalization. Analysts said the company's sweeping shift based on e-commerce, artificial intelligence (AI), and automation investments has borne fruit, sharply improving its growth prospects.
On the 3rd (local time) in New York trading, Walmart was up 2.5% at $127.16 as of 2:30 p.m., pushing its intraday market cap above $1 trillion (about 1,453 trillion won). It closed at $127.71, with a market cap of $1.018 trillion. After rising about 24% last year, it has already surged more than 12% this year.
With this, Walmart joined the $1 trillion market-cap club, standing shoulder to shoulder with Big Tech such as Amazon, Nvidia, and Microsoft (MS). Among traditional retailers that are not technology corporations, Walmart is the first to reach this tier, and among U.S.-listed companies excluding Big Tech, it is the second after Berkshire Hathaway.
Walmart's stock spike aligns with Wall Street's expectations for growth in its online business and AI-driven technology investments. Walmart has aggressively invested in logistics automation and AI to improve inventory and delivery efficiency, which has translated into rising online orders and a better expense structure. With prolonged high inflation, analysts said its low-price strategy, fast delivery, and broad product lineup also supported sales growth.
Simeon Gutman, a Morgan Stanley analyst, said Walmart has undergone a profound change over the past decade. Gutman said, "This break into the $1 trillion range is the result of a rare, fundamental shift in retail history," adding, "The growth of Walmart and Amazon is posing a significant challenge to other retailers."
But investors were not optimistic about Walmart's future from the start. At the end of 2016, Walmart's market cap was just $212 billion, while rival Amazon had built more than 160 fulfillment centers in the United States as of March and surpassed a $300 billion market cap, showing rapid growth.
Former Walmart Chief Executive Officer (CEO) Doug McMillon poured billions of dollars into wage increases, store upgrades, and expanding the online business, but investors grew more skeptical. Berkshire Hathaway began unloading Walmart equity at that time and fully exited in 2018, and Buffett was reported to have said in a currency with McMillon that he "couldn't fully understand the changes in retail."
However, this crisis appears to have served as a catalyst for Walmart's rapid growth. Walmart then expanded e-commerce to widen its sales gains and strengthened its product lineup targeting high-income consumers. It also built a logistics network to allow same-day delivery to 95% of U.S. households, and through AI-driven warehouse automation and its advertising business, it kept its global workforce around 2.1 million while improving expense efficiency.
In fact, Walmart released results last year indicating that its e-commerce institutional sector had entered a profit-making phase for the first time. In addition, it transferred its listing from the New York Stock Exchange (NYSE) to Nasdaq in Dec., seeking to shift perceptions toward a technology corporations identity, a strategy that appears to have worked.
Meanwhile, with a sudden change at the top, some say it remains to be seen whether the company can sustain its growth momentum. McMillon, who led the company for 12 years, stepped down at the end of Jan., and John Furner, who oversaw the U.S. business, took over as the new CEO. Walmart is pursuing ways to apply AI across operations companywide, and Furner reportedly asked employees to "share examples of bureaucracy within corporations that need to be eliminated."