The more things change, the more things stay the same. That can describe how Walmart (WMT +0.71%), the most traditional of physical retailers, continues to innovate while retaining its brand and low prices. Despite an onslaught of e-commerce and tech disruptors, Walmart remains the largest company in the world by sales, and it continues to grow despite a challenging environment that has impacted many retailers negatively.
Its stock is reflecting this resilience. It's up 22%, outpacing the S&P 500, and Walmart could be a top value holding heading into the new year.
Image source: Getty Images.
Why Walmart is winning
Walmart is a powerhouse discount retailer that's drawing even more interest in the high-inflation environment. Since much of its merchandise is local, it hasn't been as adversely impacted by tariffs as other companies, and it has enjoyed robust growth recently.
In the 2026 fiscal third quarter (ended Oct. 31), revenue increased 5.8% year over year, and that was outpaced by an 8% increase in adjusted operating income. Earnings per share (EPS) were up from $0.58 last year to $0.62 this year.
Walmart gained market share in grocery and general merchandise, and while there was consumer strength across income levels, it was particularly strong for higher-income earners. Part of that is coming from the company's investments in e-commerce, since it can offer a broader merchandise assortment online and reach customers who wouldn't necessarily walk into a store. E-commerce has been an incredible growth driver overall, and sales increased 27% year over year. It's also expanding its advertising business, and ad sales increased 53% year over year in Q3.
Beyond e-commerce itself, Walmart has been investing in technology to expand its business and stay ahead of new retail trends. It's partnering with OpenAI for customers to be able to check out through ChatGPT, and it's training its developers to save time by coding with AI. It's automating its infrastructure and fulfillment networks to save time and money so it can continue to offer its low prices to customers. That commitment is helping it take market share in a shopping climate that's challenging for many consumers.
NASDAQ: WMT
Key Data Points
Making many moves
Walmart has 4,700 U.S. locations and more than 10,000 stores worldwide. Even with the rise of e-commerce, you can't beat the traditional retail model, but Walmart is making moves to stay on top, like the investments in e-commerce and a recent acquisition of streaming company Vizio, which is a part of its advertising strategy.
It made two important announcements recently. After a decade at the helm of the biggest company in the world, CEO Doug McMillon is stepping down at the end of the year. John Furner, who currently heads the U.S. business, is stepping into the leading role.
Another change the company recently announced is that it's changing from the New York Stock Exchange (NYSE) to the Nasdaq. The Nasdaq is a tech-heavy stock exchange, and management said that it reflects the company's brand identity as moving forward with technology. Although this doesn't change much for investors, it means that Walmart stock can be included in indexes and exchange-traded funds (ETF) that draw from the Nasdaq, like the Nasdaq-100. In other words, it's winning today and leveraging its momentum to position itself for further success in 2026.
While the new moves are an important element in Walmart's growth efforts, the investing thesis includes Walmart's stability. Part of that is its dividend; Walmart is a Dividend King, an exclusive cadre of stocks that have raised their dividend annually for at least 50 years. That's an impressive feat, and it signifies ultimate reliability for passive income investors.
Walmart is having an incredible moment, and it's poised to keep it up in 2026 and further.
