MW Walmart just became a $1 trillion company. Here's what it needs to do to remain one.
By Bill Peters
Big-box retailer has made massive stock gains by thinking more like a tech company
Walmart's journey to a $1 trillion market cap came after embracing technology and providing its customers with greater relief from inflation.
Walmart became $1 trillion company on Tuesday. To get there, the low-price retailer had to embrace the thinking of its multitrillion-dollar counterparts in the technology sector.
While the achievement was still on an intraday basis, Walmart $(WMT)$ is just the 10th U.S. company currently above that market-capitalization threshold and just the second nontech company, the other being Berkshire Hathaway $(BRK.B)$.
But staying above that symbolic metric, analysts say, could require the retail chain to hit profitability targets it hasn't reached in more than a decade - before Amazon.com (AMZN) became a bigger threat - and to see a payoff from some big technology investments amid concerns about the job market and an artificial-intelligence bubble.
"To justify this current share price, they'd have to be achieving margin expansion that would exceed their historical highs," Morningstar analyst Brett Husslein said of Walmart. "That's going to be challenging. But at the same time, we're forecasting a fair amount of operating margin expansion as well."
John Furner, who took over as chief executive on Feb. 1 to lead Walmart into the AI era, faces other challenges, as well.
Eric Schiffer, who oversees investments for Patriarch Organization, a family office that once ran as a private-equity firm, said that over the next decade, Walmart and other retailers need to find the right way to compete for attention on AI platforms, as retailers turn to chatbots and agents to attract more consumers.
"The market is already assuming and betting in the valuation that Walmart's going to get that part right," he said.
Walmart shares surged 2.1% in recent morning trading toward a record close and have run up 8.6% amid a four-session winning streak, lifting the retailer's market cap to $1.01 trillion. Based on the 7.97 billion shares that were outstanding as of Dec. 2, the stock would have to close at $125.47 or higher to make the trillion-dollar title official.
The stock has climbed 13.7% so far in 2026 after soaring 136% over the previous three years.
Walmart's market value still pales in comparison to the likes of Nvidia (NVDA), which is the leader with a market cap of $4.37 trillion. Next in line are Alphabet $(GOOGL)$, Apple $(AAPL)$, Microsoft $(MSFT)$, Amazon, Meta Platforms (META), Tesla $(TSLA)$, Broadcom $(AVGO)$ and Berkshire Hathaway.
AI and two decades of tech disruption and consolidation have helped most of those trillion-dollar names. For Walmart - whose rise through the second half of the last century ran up against competition from Amazon - it required changes that didn't always sit well with investors. Those included buying e-commerce site Jet.com and investing in warehouses and curbside pickup, TD Cowen analyst Oliver Chen said.
"It's really Doug McMillon making sacrifices to short-term pain for long-term gain," he said, referring to Walmart's outgoing CEO.
When the bigger affordability crunch began in 2022 as prices started to spike, Walmart, with its focus on discounts, became a port in the inflation storm for consumers. Wealthier shoppers started showing up. Walmart's quarterly results largely remained steady.
In addition, Walmart's e-commerce segment recently turned profitable. The company has moved into higher-margin areas like digital advertising, allowing advertisers to buy ad space within its online ecosystem. Operating margins on digital ads, Chen said, can run as high as 60% to 80%.
Walmart has also cozied up to the technology world. It moved its stock to the more tech-friendly Nasdaq exchange, where the shares of big tech companies trade. It has also taken steps to allow shoppers to make purchases through OpenAI's ChatGPT, and a partnership with Google's Gemini AI platform will feature products sold at Walmart stores in Gemini's answers to questions. Walmart also has its own AI shopping assistant, called Sparky, that can make shopping recommendations and help consumers plan events.
The company even calls itself a "tech-powered omnichannel retailer."
Still, Husslein noted, Walmart doesn't have, say, a highly profitable cloud-computing business like Amazon does. Walmart also sells a lot of groceries, which tend to deliver lower margins. Meanwhile, sales of higher-margin general merchandise - or the things in the stores that aren't groceries - took a hit for a few years when shoppers started prioritizing the basics.
Historical highs for Walmart's operating margin were greater than 6%, he said. The last time Walmart's operating margin was above 6% was during the quarter that ended in January 2015, according to FactSet.
"There will definitely need to be some tangible results driven from these tech investments," Husslein said, adding that the business would still need to become a lot more efficient overall.
Analysts see a future in which AI can figure out what consumers need to buy before the consumers even think of it. They envision bots recommending clean-up options if something gets spilled, drones quickly ushering same-day orders across town and a type of shopping where a retailer might literally have access to a consumer's refrigerator. But getting shoppers to place enough trust in a retailer to allow all that to happen remains a major hurdle.
As retailers' algorithms digest reams of consumer data, Chen also raised bigger ethical concerns concerns about the possibility of discrimination, potentially against people who spend less, and surveillance pricing, or the practice of charging a consumer differently based on what a company knows about them.
He also noted that AI has to be programmed - by people. Researchers in the past have worried about how the backgrounds of developers might filter through to the way the technology interacts with its users.
"A decision that somebody makes in, like, a Google grid completely changes the future of retail," Chen said, adding: "How do you extrapolate a small decision you're making?"
S&P 500 SPX profit margins still sit at 15-year highs. But Walmart crosses the $1 trillion barrier following a week with some high-profile layoffs, including at Amazon, as companies cut pandemic-era hires, play it safe amid the trade war or consider using AI.
But a tougher job market, analysts say, also plays into Walmart's hands.
"AI and people's job security is more in question than probably ever before," Eric Clark, chief investment officer at Accuvest Global Advisors, said in emailed commentary on Tuesday. "That tends to force you into more value-oriented spending, which drives into Walmart's lane."
-Bill Peters
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(END) Dow Jones Newswires
February 03, 2026 11:19 ET (16:19 GMT)
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