Let's start with the number that should make you do a double take.
Walmart is worth $1 trillion. The same Walmart where you buy store-brand cereal and return things without a receipt. The same company that competes on price for toilet paper and sells $3 rotisserie chickens. It now sits in the same market cap stratosphere as Apple, Microsoft, and Nvidia.
And tomorrow morning, before the market opens, we find out whether the people who bid it there are geniuses or optimists who got carried away.
The Valuation Problem
Here is the number that keeps analysts up at night: Walmart is currently trading at roughly 45x forward earnings. For context, the S&P 500 historically trades around 16-18x. Even fast-growing tech companies often justify 30-35x. Walmart, a company that moves physical goods through physical stores, is priced like a high-growth software business.
So either the market is pricing in something that hasn't fully shown up in the financials yet, or this is one of the most stretched valuations in retail history. Tomorrow's earnings will begin to answer that question.
The Walmart Connect Story: Why Wall Street Suddenly Thinks This Is a Tech Company
If you want to understand the trillion-dollar valuation, you need to understand Walmart Connect.
Here is the parallel that makes it click. Amazon built one of the most profitable advertising businesses on the planet by letting brands pay to appear in front of shoppers who are already actively looking to buy something. Search-intent advertising — showing an ad to someone who just typed "running shoes" into a search bar — converts at dramatically higher rates than social media ads or display banners. Amazon figured out it was sitting on a goldmine and built a multi-billion-dollar ad business on top of its retail operation.
Walmart is running the same playbook. With 255 million customer visits weekly across stores and digital channels, Walmart Connect allows brands to buy targeted ad placements against that proprietary shopper data — both online and, increasingly, on the screens inside physical stores. The margins on advertising are in a completely different league from selling groceries. A grocery sale might generate 2-3% margin. An ad placement can generate 50-70% margin.
