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Why Walmart's 5% growth is good, but Amazon's 10% growth is bad

Amazon hasn’t passed Walmart in revenue yet. Market cap is a whole different story.

8/15/24 9:43AM

When Amazon’ssales rose just 10% last quarter, investors were disappointed. This morning, when Walmart posted a quarterly revenue jump half that size, it was cause for celebration. The big-box retailer’s stock was up nearly 8% premarket.

Someday soon, Amazon will likely pass Walmart in total revenue, but it hasn’t happened yet.

Of course, despite both being known for their giant consumer-goods businesses, Amazon is a very different company than Walmart. While 5% revenue growth is great for a pure retail business like Walmart, a 10% growth rate is historically on the low side for Amazon. JPMorgan does expect Amazon to overtake Walmart in gross merchandise value, or the total amount sold through their marketplaces but not necessarily coming to the retailers, this year.

Meanwhile, Amazon’s valuation is more than three times Walmart’s, having surpassed its market cap back in 2015. That’s because, in case you forgot, Amazon’s also a tech company. In addition to its huge retail business, its Web Services business also drives revenue and is highly profitable. In its latest quarter, Amazon’s net income was $13.5 billion, compared with Walmart’s $4.5 billion.

Still there’s a lot the same about these two giant businesses. Walmart’s Amazon-like e-commerce business continues to climb. And both are increasingly making money selling ads. Walmart’s ad business was up 26%, while Amazon’s grew 20%.

Millie Giles

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Demis Hassabis, Google DeepMind’s CEO and founder, was also an early Anthropic investor

A chess prodigy and an actual a knight of the realm in the UK, it’s perhaps no surprise that Demis Hassabis has made some strategic moves about his exposure to AI upside. According to people familiar with the matter, the influential AI architect became an angel investor in Anthropic, currently behind many of the leading AI models, per Arena AI leaderboards.

The Nobel Prize winner’s position in the Claude creator was previously undisclosed and, per the Financial Times, highlights Hassabis’ “growing influence across the AI industry.”

Google, which bought DeepMind, the company that Hassabis cofounded and heads to this day, for a reported ~$400 million in 2014, is also a key Anthropic investor. The tech giant reportedly plans to invest up to $40 billion in the AI company as part of the mutually beneficial relationship the pair have forged, with reports that Anthropic has committed to spending $200 billion in the other direction on Google’s cloud services over the next five years.

I’m playing all sides, so I always come out on top

In addition to his financial support for Anthropic, Hassabis has also invested in a range of AI startups launched by colleagues, such as Inflection AI, a company set up by DeepMind cofounder Mustafa Suleyman (who is now CEO of Microsoft AI), as well as efforts from other collaborators, like David Silver’s Ineffable Intelligence.

Hassabis also emerged as a recurring figure on the fringes of the recent Elon Musk v. Sam Altman trial, cropping up repeatedly in testimonies and court documents and appearing to live, as The Verge put it, “rent-free” in Musk’s head.

Founded in 2021, Anthropic has recently raised funding at a reported $900 billion valuation, sending it soaring ahead of competitor OpenAI.

Google DeepMind’s Demis Hassabis emerges as early Anthropic investor

The Nobel Prize winner’s position in the Claude creator was previously undisclosed and, per the Financial Times, highlights Hassabis’ “growing influence across the AI industry.”

I’m playing all sides, so I always come out on top

Founded in 2021, Anthropic has recently raised funding at a reported $900 billion valuation, sending it soaring ahead of competitor OpenAI.

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In a unanimous verdict reached after less than two hours of deliberation, the Oakland jury found that Musk had waited too long to bring his case forward, exceeding the statute of limitations.

Musk had alleged that OpenAI abandoned its founding mission as a nonprofit dedicated to developing AI for humanity and instead became a profit-driven company closely tied to Microsoft.

The verdict caps off a three-week blockbuster tech trial that could have seen Altman and Brockman removed from OpenAI leadership.

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The verdict caps off a three-week blockbuster tech trial that could have seen Altman and Brockman removed from OpenAI leadership.

Millie Giles

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