Amazon’s forward P/E rarely falls below Walmart’s as AI capex bet becomes key valuation battleground — BigGo Finance

Amazon’s valuation is exhibiting a rare phenomenon: the e-commerce and cloud computing giant’s forward price-to-earnings ratio has fallen below that of traditional retailer Walmart, even though Amazon’s revenue growth is projected to be three times faster. Behind this inversion lies deep market skepticism over whether roughly $220 billion in AI capital expenditure can deliver returns—and the latest demand signals from AWS management are adding new context to the debate.

According to a report by The Information on Sunday, Amazon currently trades at approximately 29 times forward earnings, while Walmart trades at roughly 37 times. Walmart’s revenue is expected to grow about 5.6% this year, only about one-third of Amazon’s projected pace, yet its valuation premium has persisted for approximately 18 months. Elevated capital spending and uncertainty over AI investment returns are the primary reasons investors are applying a discount to Amazon.

The crux of the debate is whether…