Amazon takes the No. 1 spot on the Fortune 500, ending Walmart’s 13-year run

If the approach sounds familiar, it’s because it echoed a favorite saying of a precursor of Bezos: Sam Walton, Walmart’s founder, who is still the object of cult-like adoration among the company’s rank and file 33 years after his death. “There is only one boss: the customer,” Walton loved to say. “They can fire everyone in the company simply by spending their money elsewhere.”

It’s an ethos that propelled both Amazon and Walmart to the upper echelons of corporate America—but for the past 13 years, and 21 of the past 24, Walmart has been on top, in the No. 1 spot on the Fortune 500. Now, a changing of the guard is underway.

Early on Feb. 19, Walmart reported total revenue of $713.2 billion for the recently ended fiscal year. That’s up 4.7% from the prior year and the company’s all-time highest top line. But it was a hair less than the $716.9 billion full-year revenue Amazon reported two weeks ago, meaning that, barring any unexpected surprises, Amazon will rank No. 1 on the next edition of the Fortune 500 list, which will publish in early June.

It’s an astonishing feat by Amazon, founded in 1994 in the Seattle area. In 2010, its revenue was $34.2 billion, while Walmart, founded in 1962 in Rogers, Ark., was more than 12 times that size, with about $422 billion in revenue.

Astonishing, perhaps, but let’s face it, not surprising. Between 2018 and 2025, Amazon achieved a cumulative annual growth rate about three times that of Walmart. Amazon is not just an online retailer, but also a giant in cloud computing services via its lucrative AWS division, where the pie is growing much more quickly than retail is.

There’s also a certain Darwinian logic to Amazon’s ascension to the top of the food chain. Arguably, the upstart has done to Walmart what Walmart itself did to Sears and Kmart in the 1980s. It’s what countless upstart entrants have done to incumbents in every industry since time immemorial: supplant lumbering, bureaucratic companies too beholden to “the way things were” by outmaneuvering them with agility and new ideas.

But in this case the story isn’t quite so simple. There is plenty of nimbleness—and bureaucracy—at both companies. Indeed, a big irony in this corporate saga is that the two archrivals, which started as very different companies, have borrowed so many moves from each other that they have come to resemble each other—in both their revenue breakdown and culture.

How did Amazon catch up with Walmart?

Amazon essentially invented e-commerce as we know it—in that it figured out how to develop a practical, easy way to shop online and take it mainstream. The Seattle company now dominates the U.S. market with roughly 40% of digital retail sales. Some 180 million Americans have a Prime account, according to recent data from CapitalOne Shopping Research. But Amazon didn’t overtake a rival with a 32-year head start by remaining wedded to one line of business or following one approach to running it.

Amazon has won its mammoth market share by prioritizing constant reinvention. Bezos and his successor, CEO Andy Jassy, have sought to maintain a “day one” culture, meaning people should always act and feel like they work at a brand-new company, and not let stasis and bureaucracy settle in and stifle innovation.

With Prime, launched in 2005, Amazon built a still peerless loyalty program that locked shoppers in with 80% of U.S. households having a membership. The highly successful entertainment offerings available on Prime’s streaming service help sweeten the deal for customers and have made the membership very sticky. And in the process, Amazon also became a kind of Hollywood film studio with original offerings such as its Emmy Award–winning TV series The Marvelous Mrs. Maisel and the Oscar-winning movie Manchester by the Sea.

Miguel J. Rodriguez Carrillo—Bloomberg/Getty Images

But perhaps the most pivotal move in Amazon’s history was the launch in 2006 of Amazon Web Services—the company’s entrance into the IT infrastructure and cloud computing business. AWS, which Jassy was tasked in 2003 with turning into a business, originally emerged as an initiative to boost Amazon’s internal computing capacities, but the company soon realized it could sell the service to others.

In 2025 AWS generated operating income of $45.6 billion, on revenue that rose 20% to $128.7 billion from the prior year. While AWS generates less than a fifth of Amazon’s revenue, it is the source of more than half of its operating profit, making it a cash cow that subsidizes new product development in a way rivals can’t match.

Amazon’s constant drive for new products and services has not always met with success. Remember the pricey Amazon Fire Phone, launched in 2014? Perhaps not: It was a major flop. More recently, Amazon’s convenience and fresh food physical stores Go and Fresh didn’t live up to Bezos’s expectations and are closing after a few years—a lesson in the challenges of brick-and-mortar retail, ironically, in the age of e-commerce that Amazon itself ushered in. Another disappointment was Amazon Care, a virtual and in-home primary care medical service launched in 2019 that the company shut down at the end of 2022. (Walmart has also seen its own health care ventures fail: It opened 51 clinics starting in 2019, only to close them all five years later.)

But even the failures have arguably helped strengthen Amazon. The company embraces the “fail fast” iterative ethos of Silicon Valley. “They are okay with failing,” says Sucharita Kodali, principal analyst at the tech-focused Forrester Research. “All of these tech companies just throw things at a wall to see what sticks.”

And many things have indeed stuck. For every Fire Phone debacle, Amazon has seen multiple successes—some built upon lessons from those failures.

All in on AI

It should be no surprise given its history of making big bets in pursuit of big payoffs that Amazon has massive AI ambitions: The company, which for years operated at a loss to fund its e-commerce growth, spooked Wall Street this month when it said it expected to spend $200 billion in 2026 on things like “AI, chips, robotics, and low earth orbit satellites.” It’s clear that Amazon is not just competing with Walmart and Costco, but also with Google, Microsoft, and Meta, the “hyperscalers” behind a massive AI data center build-out across the nation.

Fulfilling those ambitions for Jassy means having to continually channel Amazon’s “day one” culture. He has made painful moves in recent months like cutting 30,000 jobs to reduce what he sees as creeping bureaucracy. (Last summer, Jassy had said that AI would mean that Amazon will eventually need fewer workers.)

Elsa—Getty Images

Neil Saunders, managing director of research firmGlobalData, says for a company Amazon’s size, taking risks is actually a prudent course of action. “Indeed, the cost of not making bold moves is far riskier than the cost of steep investment,” he said.

As it takes the crown of the Fortune 500, Amazon joins rarefied company: Walmart, Exxon Mobil, and General Motors are the only other companies to ever top the Fortune 500 list in its 72-year-history).

Still, the pivot to AI reflects the fact that even mighty Amazon faces the challenges of aging. Its foundational North American retail business is now seeing slower growth. Last year, it rose 10%—still pretty good, and an outperformance of the broader industry, but a far cry from the rates of just a few years ago. Yet Amazon continues to invest in its e-commerce, most recently testing a 30-minute delivery option called Amazon Now in its hometown of Seattle and in Philadelphia. It needs those investments thanks to an ever-slimming lead in e-commerce—where its toughest competitor is a relative upstart named Walmart.

Walmart’s reawakening

Paradoxically, Amazon’s approach has been key to Walmart’s own transformation. Walmart’s first stab at e-commerce came in 1996, when it launched rudimentary online sites for the Walmart U.S. and Sam’s Club divisions. But those were short-lived, and Walmart brass didn’t seem to grasp the tectonic shift in how consumers shop that was brewing. They dismissed e-commerce as a fad and were overconfident that Walmart’s massive fleet of stores and its leading distribution system provided a competitive moat.

Walmart was, after all, the company that by 1990 had toppled Sears, J.C. Penney, and Kmart to become the largest U.S. retailer—thanks to its techy innovation in things like satellite-linked store systems, centralized data, and vendor-managed inventory. Now, it found itself at risk of being outdone by an even techier upstart.

There is nothing like an existential threat to wake up a company. And in 2014, when Walmart appointed Doug McMillon, a Walmart lifer who began as an hourly worker unloading trucks, as CEO, it got itself a young, tech-forward executive to transform the tradition-bound, stagnating company into a real e-commerce player.

After some fits and starts, including launching a tech incubator and buying online retailer Jet.com, Walmart eventually found its way. The company figured out how to truly connect its thousands of stores with its e-commerce operation, so those stores can act as nodes in a massive distribution system to offer faster delivery or pickup of orders. That allowed Walmart to shine, and win millions of new customers, during the pandemic. And it gave the big-box store an edge over Amazon in some competitive arenas, especially in grocery delivery and pickup, which still bedevils Amazon (other than at Whole Foods, the grocery chain Amazon bought in 2017).

Jason Davis—Getty Images for Bentonville Film Festival

As a result, Walmart is now the second-largest e-commerce player in the U.S. with digital sales of some $120 billion a year—still far behind Amazon, but well ahead of any other U.S. retailer. In its most recent quarter, Walmart’s U.S. e-commerce rose 27%, and 24% globally.

To be sure, Walmart’s rejuvenation of its business hasn’t come solely in reaction to Amazon. It has also doubled down on its non-Amazon-like qualities, investing heavily in making its stores more appealing. And it has stolen market share from brick-and-mortar rivals such as Target and Kroger.

But Amazon’s relentlessness has meant Walmart cannot let down its guard. McMillon’s recently installed successor, John Furner, another company lifer who has led Walmart’s $500 billion U.S. business and Sam’s Club warehouse business, also played a central role in Walmart’s emergence as a tech company. And the new CEO’s marching orders, from a board that includes members of the founding Walton family, are clear: keep pushing on the tech front.

Walmart has been acting like a tech-centric company for a while now. (It even recently moved its stock to trade on the tech-focused Nasdaq stock exchange to underscore that shift.) It has quickly built fast-growing, profitable ventures in advertising, media, and online marketplaces.

The retail behemoth is also way ahead of other brick-and-mortar retailers in AI-assisted shopping, having inked an agreement with OpenAI to let shoppers browse and buy Walmart products directly inside ChatGPT, using a built-in instant checkout feature. Walmart also has a generative-AI-powered shopping assistant it calls Sparky that offers more conversational and personalized help with shopping. Amazon, for its part, is developing auto-ordering for the replenishment of staples. It’s yet another sphere for the two longtime rivals to compete in.

A two-company fight

Would Walmart have bothered to reinvent itself to such a great extent without Amazon’s challenge? Highly doubtful. Their battle has made both companies stronger and more similar to each other in many ways. “There’s certainly a Venn diagram of overlap between the two now,” says Forrester’s Kodali.

With Amazon’s focus on tech, gigantic distribution and delivery infrastructures (Amazon delivers 29% of packages in the U.S. itself—more than UPS), streaming, advertising, and marketplaces, Walmart and Amazon will continue to jostle for dominance in fields far beyond e-commerce.

In 2024, in an interview in his office at Walmart headquarters, in Bentonville, Ark., Fortune asked then-CEO McMillon how he felt about the prospect of Amazon passing Walmart to become No. 1 on the Fortune 500, which our projections anticipated would happen with the 2026 list.

He took a moment and then replied: “Being first on the list also brings some disadvantages”— alluding to the idea that everybody wants to topple the king. He continued: “We’re trying to get better at serving customers and members every day, and that’ll be true whether we’re first or second.”

Given that Amazon has built out its footprint in much faster-growing sectors than Walmart has, Walmart is unlikely to catch up with Amazon anytime soon.

But Walmart’s executives and shareholders can savor a nice consolation prize: Walmart’s shares are near an all-time high now, pushing its market capitalization past $1 trillion. In fact, over the past five years, Walmart’s share price has risen 167%, almost seven times as much as Amazon’s. Not bad for a dethroned titan.

This article is part of the Feb. 19, 2026, Special Digital Issue of Fortune.