Walmart crossed above $1 trillion in market value on Tuesday. The company became the first traditional retailer to hit this milestone. It now joins a small club mostly made up of technology giants such as Apple and Microsoft. According to The New York Times, Walmart’s stock has climbed about 28 percent over the past year.
E-Commerce Growth Drives Success
Digital sales have been a major driver of growth lately. Walmart’s e-commerce business includes curbside pickup, same-day delivery and a growing third-party marketplace. The company’s advertising business has also become important to its bottom line.
In its last quarter, Walmart reported a 27 percent increase in e-commerce sales. Advertising revenue jumped 53 percent. Sarah Henry, managing director at Logan Capital Management, said Walmart management was prescient in building out a business model optimized for this moment.
Strategic Acquisitions Paid Off
The growth is rooted in acquisitions the company made nearly a decade ago. In 2016, Walmart bought the online bulk retailer Jet.com for $3.3 billion. In 2018, Walmart bought a controlling stake in Flipkart, an e-commerce company. These moves helped the company compete with Amazon for online customers.
Technology and Retail Combined
Walmart built a new 350-acre campus in Bentonville, Arkansas. The campus resembles headquarters of companies in Silicon Valley. It features a food hall, an amphitheater and sprawling fitness and child care centers. The company uses this campus to compete for tech workers.
The company has pitched itself to investors as a technology-forward company. It moved its stock listing from the New York Stock Exchange to the Nasdaq. Many of the largest tech companies are listed on Nasdaq.
Walmart’s reputation for offering low prices has also worked in its favor lately. The company benefits from consumers seeking big discounts to help offset fast inflation and new tariffs. Wealthier shoppers have been attracted to Walmart’s expanding online offerings that include apparel and furniture.
Walmart’s $1 trillion valuation comes just days after John Furner assumed the role of chief executive. He replaced the company’s longtime chief, Doug McMillon. Furner is expected to accelerate Walmart’s transformation into a high-tech retailer with plans like expanding the use of AI assistants for online shoppers.
