In a sign of the times, AI memory chip play Micron (MU) is the latest $1 trillion market cap company, while mighty Walmart (WMT) has exited the exclusive club, for now.
The quick analysis: Micron crossed the $1 trillion market cap milestone for the first time on May 26 amid soaring AI enthusiasm.
On the other hand, the vibe around Walmart’s stock couldn’t be more different at the moment. The retail giant’s market cap currently stands at $945 billion. The stock is up 5% this year, underperforming S&P 500’s (^GSPC) 10% gain.
Walmart officially crossed the $1 trillion market cap for the first time on Feb. 3, making it the first traditional bricks-and-mortar retailer in history to join the elite trillion-dollar club.
But Walmart fell below that closely watched level on May 21 in response to earnings and has stayed below it since.
Why the market has slightly checked out on Walmart: The retail giant surpassed Wall Street’s revenue expectations last week with $177.8 billion, a 7.3% year-over-year increase. It matched profit estimates with adjusted earnings per share of $0.66. Walmart saw a 26% surge in global e-commerce sales and a 4.1% US same-store sales increase.
But the stock tumbled primarily because management’s guidance underwhelmed. Walmart projected second quarter earnings per share between $0.72 and $0.74, below the $0.75 per share consensus, and reiterated a full-year earnings per share midpoint of $2.80, missing the $2.92 analysts had modeled.
Walmart CFO John David Rainey told Yahoo Finance that the business remains solid, but consumers are cautious.
“The second quarter has started pretty much how the first quarter ended,” Rainey said (video above). “We continue to combat high fuel prices and what is maybe a little bit of a choppy consumer environment. Certainly, the first quarter benefited from tax refunds. But look, our business is strong.”
Bottom line: Walmart execs hunkered down in their posh new headquarters in Bentonville, Ark., can probably care less about the $1 trillion market cap club. That group is so focused on the details of dominating retail that they envision becoming a $5 trillion company in a decade.
But hey, it’s a nice large round number to pontificate on!
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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