Retail Giants Playing Hardball

The Players: Walmart and Costco

You know Walmart and Costco, right? These retail behemoths are not just about bulk toilet paper and mega discounts. In 2026, they’ve continued to rock the market with some solid numbers. Get this: Costco’s shares jumped over 9%, and Walmart is up more than 12% year-to-date. Meanwhile, the S&P 500 is taking a bit of a nap.

The E-Commerce Edge

Their secret sauce? E-commerce magic and a macroeconomic tailwind pushing consumers toward value. Walmart’s U.S. digital ad sales soared 41% last quarter. On the other hand, their e-commerce sales grew 27%. Not too shabby!

Costco isn’t slacking either, with e-commerce sales climbing at 22.6%. It’s their eighth quarter growing above 20%! But for all their digital gains, there’s still a gorilla in the room called Amazon.

Amazon: The Underdog?

Market Dynamics

Despite the hype, Walmart and Costco still find it hard to nick Amazon’s market share. Amazon upped its e-commerce slice from 34.4% in 2024 to 35.7% in 2025. Not bad for the big guy. Even with a massive base, Amazon’s growth shakes up the market.

Some investors scratch their heads when Amazon trades for an enterprise value only 10.8 times the 2026 EBITDA. Walmart’s got a multiple over 21, and Costco’s nearly at 30.

Numbers Game

Amazon’s numbers tell the story. Analysts expect their EBITDA to rise 40% this year. Comparatively, it’s just 10% and 8% growth for Walmart and Costco over the next few years. So, what’s dampening Amazon’s sparkle? Cloudy skies over Amazon Web Services (AWS).

The Big Cloud Factor

AWS: The Double-Edged Sword

AWS is the elephant in the room, accounting for most of Amazon’s operating income in 2025. It brought in $45.6 billion from the total $80 billion operating income. The cloud business is a big influencer of Amazon’s valuation.

In January, Amazon announced a huge $200 billion spend to boost AWS capacity. CEO Andy Jassy is confident they know how to turn demand signals into returns. It’s not just about the cloud, though; it’s about seeing the bigger picture.

Financial Implications

Amazon’s lavish spending means their free cash flow might go negative in 2026. For a company that loves flaunting free cash flow, this could shake things up. Some investors might get jittery.

Here’s where it gets interesting. Amazon trades at just 27 times analysts’ earnings estimates. Compare that to Walmart’s 42 and Costco’s 48. Amazon, with its low earnings multiple, might just be the underdog opportunity of the century.

Potential Opportunities

Long-term investors might score a deal on Amazon’s cloud business or retail arm compared to Walmart and Costco. So, are you in for a steal? In this ever-evolving retail chess game, Amazon could be your next ace in the hole.

Key Data Overview

Source: Analysts’ reports

Isn’t it time to look beyond the aisle? Whatever happens next, this is retail drama at its finest.