Amazon expected to surpass Walmart in revenueAmazon expected to surpass Walmart in revenue

While much of the media focus on Amazon’s Q4 results centered on the online retail giant’s plan to invest $100 billion on AI in 2025, it was the net revenues of $187.8 billion, which positions the company to surpass archrival Walmart, that caught the attention of analysts focused on its retail business. 

Amazon reported earnings of $1.86 per share on that net revenue for the quarter ended in December, beating the consensus earnings estimate of $1.52 per share on $187.72 billion, according to earningswhispers.com.

Despite the positive returns, Amazon stock dipped around 4% in after-hours trading, due in part to net sales predictions for the current quarter of between $151 billion and $155.5 billion. That comes in lower than analyst revenue estimates of $158.86 billion for the quarter set to end on March 31. 

Amazon said its low estimate is the result of  the “unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates” anticipated for the quarter. 

Net sales of $5.58 billion at brick-and-mortar locations was another bright spot for Amazon on Thursday. The retailer’s physical locations experienced year-over-year growth of 8%, including its Amazon Fresh grocery locations.

Amazon also released numbers for its 2024 North American net sales, which increased 10% to $387.5 billion 

Amazon CEO Andy Jassy said in an earnings call on Thursday that the retailer enjoyed record-setting numbers for its Prime Big Deal days in October and its Black Friday and Cyber Monday sales around Thanksgiving. 

Jassy said 2024 was also a record-setting year for growth in its Amazon Prime loyalty program. The retailer’s Q4 statement also noted that Amazon “delivered over 65% more items to U.S. Prime members the same day or overnight than in Q4 2023.” 

Amazon also expanded its same-day delivery sites by more than 60% for the year “which now serve more than 140 metro areas.”

While the earnings call primarily focused on Amazon’s technology and AI business, Jassy touted the company’s grocery benefits for Amazon Prime members, including: unlimited generic prescriptions for $5 a month; unlimited grocery delivery orders over $5 a month from Whole Foods and Amazon Fresh for $9.99 a month; a free membership to GrubHub Plus; and a 10-cent-per-gallon fuel discount at BP, Amoco, and AM/PM gas stations. 

In addition to the company’s massive investment in artificial intelligence this year, Jassy said Amazon also plans capital expenditures on its in-store business “with an aim towards trying to continue to improve the delivery speed and our cost to serve.”

“And so you'll see us expanding the number of same-day facilities from where we are right now. You'll also see us expand the number of delivery stations that we have in rural areas. We can get items to people who live in rural areas much more quickly. And then a pretty significant investment as well on robotics and automation, so we can take our cost to serve down and continue to improve our productivity,” he said. 

Amazon is also working to improve delivery speeds through its pharmacy delivery business. The retailer announced in October that it plans to open 20 new brick-and-mortar pharmacy locations in major metro areas in 2025. 

“It's had a big impact on our pharmacy business, where people are able to get items same day now in lots of cities throughout the U.S., and they're just using us much more frequently than they had before …” Jassy said. 

Amazon’s AI business is beginning to dovetail with its online retail business through the release of its AI-powered chatbot, Rufus, in 2024, and Jassy noted. 

“We have so many customers now who just use Rufus to help them find a quick fact about a product. They also use Rufus to figure out how to summarize customer reviews,” Jassy said. 

“The personalization keeps getting much better. And so, you know, we expect throughout 2025 that the number of occasions where you're not sure what you want to buy and you want help from Rufus are going to continue to increase and be more and more helpful to customers.”