Alibaba Soars, Amazon Tops Walmart: Retail and Tech Giants Face Off

Alibaba’s Earnings Spark Rally

Chinese tech behemoth Alibaba delivered a blowout performance in the final quarter of 2024, with net profit soaring 239% year-over-year to 48.945 billion yuan ($6.72 billion). The company’s impressive results were driven by a robust 13% increase in its Cloud Intelligence Group sales and rapid advancements in artificial intelligence. Alibaba’s shares surged 8.1% in the U.S. on Thursday and climbed nearly 15% in Hong Kong on Friday, marking their highest point since early 2022.

CEO Eddie Wu credited the earnings beat to the firm’s strategic pivot toward cloud services and AI, which have become significant revenue streams. Analysts at Barclays noted that Alibaba’s aggressive investments in AI and cloud infrastructure over the next three years could exceed its expenditures over the past decade, signaling strong long-term growth potential.

Amazon Overtakes Walmart in Quarterly Revenue

Amazon reached a major milestone, reporting $187.8 billion in revenue in the fourth quarter of 2024, surpassing Walmart’s $180.5 billion. This is the first time Amazon has beaten Walmart in quarterly revenue, highlighting the growing influence of Amazon’s diversified business model, which spans retail, cloud computing, advertising, and third-party seller services.

While Amazon’s core retail operations remain a powerhouse, Amazon Web Services (AWS) and its advertising segment are increasingly contributing to the bottom line. AWS alone accounted for nearly 17% of total sales last year. Amazon’s evolving ecosystem is proving to be a formidable force in the market, and the latest figures indicate that its growth is far from slowing down.

Walmart’s Growth Slows as Investors Pull Back

Despite maintaining its title as the world’s largest annual revenue generator, Walmart’s outlook appeared less optimistic. The company projected slower sales and profit growth for fiscal 2026, causing its shares to fall by 6% on Thursday. Walmart CFO John David Rainey emphasized the cautious spending behavior of consumers, noting that “wallets are still stretched.”

While Walmart has successfully attracted shoppers with its low prices and convenience, executives warned of potential challenges from new tariffs and broader economic uncertainty. Walmart’s forecasted 3-4% revenue growth for fiscal 2026 fell short of analysts’ expectations, leading to investor disappointment.

Broader Market Reaction: Walmart Drags Dow, Alibaba Lifts Asia

U.S. markets pulled back Thursday, with the S&P 500 down 0.43%, the Dow Jones Industrial Average dropping 1.01%, and the Nasdaq Composite slipping 0.47%. Walmart’s disappointing fiscal 2026 outlook was a key factor behind the Dow’s decline, as investors reacted to the retail giant’s warning of slower growth and profit targets that fell short of expectations.

In contrast, Asian markets rallied on Alibaba’s stellar performance. Hong Kong’s Hang Seng Index surged over 3.4%, driven by Alibaba’s nearly 15% jump in shares, while Japan’s Nikkei 225 edged up 0.2% amid sustained consumer price growth.

Market Forecast: Bullish on Alibaba and Amazon, Cautious on Walmart

Alibaba’s cloud and AI-driven growth, coupled with Amazon’s diversified revenue streams, present bullish opportunities for traders. Alibaba’s strong recovery in China’s e-commerce sector and its ambitious investment plans in AI could propel further gains. Amazon’s consistent performance across multiple business units reinforces its upward momentum.

Conversely, Walmart’s cautious outlook and slower projected growth suggest a more conservative approach. While its fundamentals remain solid, traders might expect volatility as the retail giant navigates economic uncertainties and competitive pressures from Amazon.

Overall, a bullish stance on Alibaba and Amazon appears well-supported, while a wait-and-see approach might be prudent for Walmart in the near term.

More Information in our Economic Calendar.