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E-commerce has become a crucial part of competing in retail, and Walmart has expanded its online presence alongside its broader retail dominance. While Walmart is already the world’s largest retailer and the second-largest online retailer in the United States, attention is increasingly turning to how advertising is contributing to its financial performance.
Walmart generates ad revenue primarily from third-party sellers that pay for placement in search results on Walmart’s online marketplace, similar to Amazon’s model, as well as from VIZIO connected TVs. In Walmart’s fiscal year 2026, global ad revenue totaled $6.4 billion. That figure represented a 46% increase, but it remains a relatively small portion of the company’s overall net revenue of $713.2 billion.
Despite the smaller share of total revenue, digital advertising can carry high profit margins because the incremental cost of placing ads is low. For a retailer operating at thin merchandise margins, even modest ad revenue can have an outsized impact on profitability.
In the fourth quarter of fiscal year 2026, ad revenue combined with Walmart+ membership fees accounted for approximately one-third of the company’s operating profit. With ad revenue up 46% in fiscal year 2026, the article argues that advertising could evolve into a more significant profit center for Walmart over time.
Walmart is described as one of the world’s most dominant retailers, and investors have historically paid a premium for the stock. Over the past decade, Walmart’s average price-to-earnings (P/E) ratio has been 31. The article notes that the stock trades at around 46 times earnings, suggesting it is currently priced above long-term norms.
The article also frames advertising growth as a factor that could influence future earnings. It asks what earnings growth could look like if advertising reaches 5% to 10% of total revenue. It further states that Wall Street analysts currently expect Walmart’s earnings to grow by an average of 8.8% over the long term, with potential upside if advertising continues to expand.
Finally, the article suggests that if shares revert toward Walmart’s long-term valuation range—such as a P/E ratio in the low 30s—investors may view the stock more favorably.

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