Amazon Eyes the Top Spot in Global Sales by 2024

Amazon has been the center of attention for investors, especially after a challenging 2022 that saw the company experiencing its first annual loss in nearly a decade. However, a focus on long-term growth prospects would have rewarded investors substantially, with the stock's value surging by approximately 125% since its low point in early 2023.

Now, as we look towards the future, there is renewed optimism as Amazon regains favor in the market. This resurgence is fueled by an uptick in sales and a substantial increase in profitability. One significant development propelling the giant forward is the expansion of its Artificial Intelligence (AI) services. With its sale trajectory back on the rise, Amazon is in a strong position to reach a significant achievement soon — possibly even in 2024.

Amazon's Chase for the Top Spot

While Amazon currently stands as the second-largest U.S. company in terms of sales, just behind Walmart, it ranks fourth globally, with Saudi Aramco and China's State Grid also ahead in the race. Yet, it's essential to note Amazon's tendency to close the gap with Walmart over time, thanks to its superior sales growth rates.

Assuming Amazon's management prediction holds true, a 10% increase in sales for the second quarter of 2024 could elevate its annual sales from $575 billion to $632.5 billion. However, this would still fall short of Walmart's $648 billion fiscal mark for 2024. Predicting Walmart's growth at 3.5% for fiscal 2025 would bring its sales to approximately $671 billion, narrowing the gap but not unseating Walmart from the top spot.

Exploring Other Outcomes

Nevertheless, considering a scenario where Amazon's sales increase by around 13% in 2024, it could potentially surpass Walmart's sales figure. Circumstances such as stagnant or declining Walmart sales could then lead to Amazon claiming the leading position.

While there are scenarios that could prevent Amazon from reaching this milestone in 2024, the company's track record of consistently meeting or exceeding guidance suggests it remains a contender. Sales performance below expectations is considered unlikely, given Amazon's historical patterns.

Factors Influencing Amazon's Growth

Multiple growth avenues exist for Amazon. Its e-commerce sector is regaining momentum, Amazon Web Services (AWS) is attracting more clients, and advertising, especially with the move towards ad-supported video streaming, is quickly becoming a promising segment.

The ongoing investments in AI highlight an immense potential for transformative growth, with CEO Andy Jassy likening its impact to that of the cloud or even the internet.

Conversely, Walmart benefits from a strong foundational size and continues to experience growth through new store openings, product launches, and strategies targeting higher-income customers. Displacing Walmart is a monumental task, and it may not happen in 2024, but Amazon's trajectory suggests a takeover in the ensuing years is probable.

Amazon, Walmart, Milestone