Walmart vs Amazon: Bernstein Analyzes the Battle for E-Commerce Growth

Walmart (NYSE:WMT) is gaining momentum in e-commerce, but still trails Amazon (NASDAQ:AMZN), according to Bernstein analysts. Walmart’s U.S. e-commerce sales are growing over 20% annually, with expectations to maintain a double-digit CAGR through FY30. E-commerce penetration is forecasted to climb from 17% in FY25 to 25% by FY30, fueled by a rising third-party (3P) marketplace, projected to grow at a 26% CAGR. Walmart’s strength lies in grocery, which makes up 60% of its online GMV, contrasting Amazon’s 5%.

Amazon dominates U.S. e-commerce with a 41% market share in 2024, benefiting from its superior fulfillment network, now expanded to 140 metro areas with faster same-day delivery. Amazon’s general merchandise category drives 73% of its GMV, while Walmart’s is only 26%.

Walmart’s e-commerce business is nearing break-even with a -4% contribution margin, improving to +0.5% when including retail media and Walmart+ subscriptions. Bernstein projects Walmart could boost profitability by $5 per order through retail media growth and delivery cost reductions, achieving a subsidized margin of +6.9%.

Amazon maintains a stronger margin at approximately 6% domestically, aided by its advertising revenue and ongoing fulfillment automation. Valuation comparisons show Walmart trading at a forward P/E of ~35x versus Amazon’s ~24x, though adjusted estimates place Walmart closer to 28x.

Bernstein concludes that both Walmart and Amazon are structural winners in e-commerce. Walmart is building a stronghold in e-grocery and high-frequency categories, while Amazon continues to lead in scale, logistics, and advertising, ensuring its dominance in general merchandise.